AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1999
REGISTRATION NO. 333-83797
REGISTRATION NO. 333-75937
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
ADMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BANK UNITED CORP.
BANK UNITED CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3528556
DELAWARE TO BE APPLIED FOR
(STATE OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
------------------------
3200 SOUTHWEST FREEWAY
SUITE 2600
HOUSTON, TX 77027
(713) 543-6500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JONATHON K. HEFFRON, ESQ.
EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER AND GENERAL COUNSEL
3200 SOUTHWEST FREEWAY
SUITE 2600
HOUSTON, TX 77027
(713) 543-6500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S AGENT FOR SERVICE)
------------------------
COPIES TO:
CRAIG M. WASSERMAN, ESQ. LEE MEYERSON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ SIMPSON THACHER & BARTLETT
51 WEST 52ND STREET 425 LEXINGTON AVENUE
NEW YORK, NY 10019 NEW YORK, NEW YORK 10017
(212) 403-1000 (212) 455-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined by
market conditions.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE FORM
OF PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS
WHICH ALSO RELATES TO AN AGGREGATE REMAINING AMOUNT OF $680,000,000 OF PREFERRED
STOCK, CLASS A COMMON STOCK, DEPOSITARY SHARES AND JUNIOR SUBORDINATED DEBT
SECURITIES OF BANK UNITED CORP. AND OF TRUST PREFERRED SECURITIES OF BANK UNITED
CAPITAL TRUST AND THE RELATED GUARANTEE BY BANK UNITED CORP. PREVIOUSLY
REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-3 (NO. 333-75937). THIS
REGISTRATION STATEMENT IS A NEW REGISTRATION STATEMENT, CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-75937, AND SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(C)
OF THE SECURITIES ACT OF 1933, AS AMENDED.
------------------------
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT
THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 8(A) OF THE
SECURITIES ACT, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 3, 1999
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED __________, 1999)
2,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIES(SM)")
CONSISTING OF 2,000,000 CORPORATE PIES
[BANK UNITED CORP. LOGO]
Each PIES being offered will be a Corporate PIES, which is a unit consisting of
a stock purchase contract issued by Bank United Corp. and a share of preferred
stock also issued by Bank United Corp. In this prospectus supplement, we refer
to Bank United Corp. as "Bank United."
o The stock purchase contract will obligate the holder to purchase from Bank
United, no later than , 2002 for a price of $50, the following
number of shares of Bank United common stock:
o if the average closing price of the common stock over a 20-trading day
period before , 2002 equals or exceeds $ ,
shares of common stock;
o if the average closing price during that same period is less than
$ but greater than $ , a number of shares of common
stock equal to $50 divided by the average closing price; and
o if the average closing price during that period is less than or equal
to $ , shares of common stock.
o The share of preferred stock will have a liquidation preference of $50. The
holder will pledge the share of preferred stock to secure the holder's
obligation to purchase the common stock under the related stock purchase
contract.
o Payments will accumulate under the stock purchase contracts and the
preferred stock at the combined rate of % per year, payable on
, , and of each year, beginning on
, 1999.
We have applied to have the Corporate PIES listed on the NYSE. Trading of the
Corporate PIES on the New York Stock Exchange is expected to commence within a
5-day period after the initial delivery of the Corporate PIES.
INVESTING IN THE CORPORATE PIES INVOLVES RISKS.
FOR A DESCRIPTION OF THESE RISKS, SEE "RISK FACTORS" BEGINNING ON PAGE S-17.
<TABLE>
<CAPTION>
PER CORPORATE PIES TOTAL
------------------ --------------
<S> <C> <C>
Public Offering Price................ $ 50 $ 100,000,000
Underwriting Discount................ $ $
Proceeds to Bank United.............. $ $
</TABLE>
Any accumulated dividend payments on the preferred stock and any contract
adjustment payments on the stock purchase contracts that are a part of the
Corporate PIES from , 1999 should be added to the Public Offering
Price.
Bank United has granted the underwriter a 30-day option to purchase up to
300,000 additional Corporate PIES on the same terms and conditions described
above solely to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Lehman Brothers Inc. expects to deliver the Corporate PIES to purchasers on or
about , 1999.
LEHMAN BROTHERS
, 1999
"Premium Income Equity Securities" and "PIES" are service marks owned by
Lehman Brothers Inc.
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus contain
information about Bank United and about the PIES. They also refer to information
contained in other documents filed by Bank United with the Securities and
Exchange Commission. References to this prospectus supplement or the prospectus
also mean the information contained in those other documents. If this prospectus
supplement is inconsistent with the prospectus, rely on this prospectus
supplement.
You should rely on the information in this prospectus supplement or the
accompanying prospectus or in documents that are incorporated by reference into
the prospectus. Neither Bank United nor the underwriter has authorized anyone to
provide any different or additional information. We are not making an offer of
the PIES in any jurisdiction where the offer is not permitted. You should not
assume that information in these documents is correct or complete after the date
of this prospectus supplement.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
<S> <C>
PAGE
-----
Prospectus Supplement Summary........ S-3
Risk Factors......................... S-17
Use of Proceeds...................... S-20
Price Range of Common Stock and
Dividend Policy.................... S-20
Capitalization....................... S-21
Accounting Treatment................. S-22
Description of the PIES.............. S-23
Description of the Purchase
Contracts.......................... S-26
Certain Provisions of the Purchase
Contracts, the Purchase Contract
Agreement and the Pledge
Agreement.......................... S-34
Description of the Preferred Stock... S-37
Book-Entry Procedures and
Settlement......................... S-42
United States Federal Income Tax
Consequences....................... S-44
ERISA Considerations................. S-50
Underwriting......................... S-51
Legal Matters........................ S-53
Experts.............................. S-54
PROSPECTUS
PAGE
-----
Risk Factors......................... 1
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Dividends.... 4
Bank United Corp. ................... 5
Bank United Capital Trust............ 6
Description of Offered Securities.... 8
Relationship Among the Trust
Preferred Securities, the Trust
Preferred Securities Guarantee and
the Junior Subordinated Notes Held
by Bank United Capital Trust....... 33
Selling Stockholders................. 34
Plan of Distribution................. 35
Legal Matters........................ 36
Experts.............................. 36
Forward-Looking Information.......... 36
About this Prospectus................ 37
Where You Can Find More
Information........................ 38
</TABLE>
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified by the more detailed information and the
consolidated financial statements of Bank United appearing elsewhere in this
prospectus supplement or the accompanying prospectus or incorporated by
reference in the accompanying prospectus.
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At June 30, 1999, we operated a 144-branch community banking network serving
nearly 284,000 households, as well as 18 commercial banking offices in 15 states
across the country. As of June 30, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $15.4 billion in assets, $7.2
billion in deposits and $732.8 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027, and our telephone
number is (713) 543-6500.
Our bank subsidiary's capital levels at June 30, 1999 and September 30,
1998 qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. Our bank subsidiary's capital ratios at June
30, 1999 and September 30, 1998 and the applicable regulatory capital
requirements were as follows:
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
-------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Tangible capital..................... 6.60% 6.75% 1.50% --
Core/Leverage capital................ 6.62% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.29% 9.97% -- 6.00%
Total risk-based capital............. 11.24% 10.48% 8.00% 10.00%
</TABLE>
RECENT DEVELOPMENTS
The following are selected financial data for the periods indicated. The
selected consolidated financial data as of June 30, 1999 and for the nine months
ended June 30, 1999 and 1998, respectively, are taken from our unaudited
consolidated financial statements, which in our opinion contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for these periods. These results of operations for
the nine months ended June 30, 1999 are not necessarily indicative of the
results of operations that may be obtained for the entire fiscal year. The
selected consolidated financial data as of September 30, 1998 are taken from
financial statements audited by Deloitte & Touche LLP, independent auditors,
which are incorporated into this prospectus supplement by reference.
<TABLE>
<CAPTION>
AT AT
JUNE 30, SEPTEMBER 30,
1999 1998
-------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
STATEMENT OF FINANCIAL CONDITION
DATA:
Total assets....................... $ 15,426,756 $ 13,664,992
Mortgage-backed securities......... 1,069,315 932,058
Loans.............................. 12,386,846 10,803,744
Deposits........................... 7,213,264 6,798,237
Borrowings......................... 7,022,728 5,963,751
Minority interest, Bank Preferred
Stock.............................. 185,500 185,500
Total stockholders' equity......... 732,822 684,412
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED JUNE 30,
-------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net interest income................ $ 247,745 $ 214,589
Provision for credit losses........ 17,977 16,777
Non-interest income................ 88,563 54,110
Non-interest expense............... 172,338 138,783
Income before income taxes and
minority interest............... 145,993 113,139
Net income......................... 77,309 90,645
Net income applicable to common
shares............................. 77,309 90,645
Basic earnings per common share.... 2.45 2.87
Diluted earnings per common
share.............................. 2.40 2.80
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS
ENDED JUNE 30,
-------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
OTHER DATA:
Mortgage servicing
portfolio -- period end............ $ 30,609,155 $ 29,349,450
Common shares outstanding
Period end...................... 31,703,646 31,595,596
Average -- basic................ 31,606,979 31,595,596
Average -- diluted.............. 32,239,062 32,360,747
Book value -- period end........... 23.11 21.19
Tangible book value -- period
end............................. 20.41 19.25
</TABLE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED JUNE 30,
--------------------
1999 1998
--------- ---------
<S> <C> <C> <C>
(DOLLARS IN
THOUSANDS,
EXCEPT PER SHARE
DATA)
CERTAIN RATIOS:
Return on average assets........... 0.83% 1.11%
Return on average common equity.... 14.48 19.18
Stockholders' equity to assets..... 4.75 5.11
Net yield on interest-earning
assets............................ 2.45 2.44
Efficiency ratio................... 49.93 50.23
Allowance for credit losses to net
nonaccrual loans.................. 84.67 67.55
Allowance for credit losses total
loans............................. 0.51 0.46
Net loan charge-offs to average
loans............................. 0.05 0.15
Nonperforming assets to total
assets............................ 0.65 0.65
REGULATORY CAPITAL RATIOS OF THE BANK:
Tangible capital................... 6.60 7.03
Core capital....................... 6.62 7.06
Total risk-based capital........... 11.24 10.93
</TABLE>
S-4
<PAGE>
Net income was $77.3 million or $2.40 per diluted share for the nine months
ended June 30, 1999, compared to $90.6 million or $2.80 per diluted share for
the nine months ended June 30, 1998. Two positive income tax adjustments
totalling $33.5 million recorded during the nine months ended June 30, 1998 were
the principal reasons for the decrease. Net interest income increased 15% or
$33.2 million due to higher levels of interest-earning assets, particularly in
the commercial lending businesses. Non-interest income increased $34.5 million
of 64%, due to an increase in the servicing portfolio and the average service
fee rates as well as increased mortgage banking gains resulting from single
family loan sales in the normal course of business. Non-interest expenses
increased $33.5 million or 24%, due primarily to higher levels of loan activity
and community bank branch expansion.
Net income was $24.8 million or $0.77 per diluted share for the quarter
ended June 30, 1999, compared to $23.9 million or $0.74 per diluted share for
the quarter ended June 30, 1998. Higher levels of interest-earning assets and an
increase in the net yield to 2.57% produced a 17% or $13.0 million increase in
net interest income. Partially offsetting this increase was a $12.3 million
increase in non-interest expense, primarily due to higher levels of loan
activity and community bank branch expansion.
Total assets increased $1.8 billion to $15.4 billion at June 30, 1999 from
$13.6 billion at September 30, 1998. This increase occurred primarily due to
growth in the commercial loan portfolio. FHLB advances and higher deposit levels
were the principal source of funds used to finance this growth.
THE OFFERING
CORPORATE PIES
Bank United is offering 2,000,000 Corporate PIES to the public for $50
each. Each Corporate PIES is a unit consisting of two parts:
o a purchase contract for shares of Bank United common stock; and
o a share of Bank United preferred stock.
PURCHASE CONTRACT
Bank United has entered into a purchase contract agreement with First
National Bank of Chicago, which will act as purchase contract agent for all the
holders of the Corporate PIES and the holders of the Treasury PIES described
below. Each Corporate PIES that you purchase will be issued under the purchase
contract agreement, which creates a contractual arrangement between you and Bank
United for the purchase of Bank United common stock.
Under the purchase contract, you will be obligated to purchase, for each of
your Corporate PIES, common stock at a purchase price of $50. You will not be
obligated to pay the purchase price, and you will not receive your common stock,
until , 2002, which has been set as the purchase contract
settlement date. The number of shares of common stock that you will be entitled
to receive on that date will depend on the average closing price of the common
stock over a 20-trading day period preceding that date. Until you actually
purchase the shares of common stock, your obligation to pay the $50 purchase
price will be secured by the share of Bank United preferred stock that is a part
of your Corporate PIES. That share of preferred stock will be pledged as
collateral. More information about the purchase contracts is provided under the
heading "Description of the Purchase Contracts" starting on page S-26.
PREFERRED STOCK
Each Corporate PIES you purchase will include a share of preferred stock of
Bank United. The liquidation preference of each share of preferred stock of Bank
United is $50.
S-5
<PAGE>
On or after , 2002, the shares of preferred stock will be
redeemable at the option of Bank United, in whole or in part, at any time and
from time to time, at 100% of their liquidation preference. In addition, on
, 2004, all outstanding shares of preferred stock will be
redeemed by Bank United at 100% of their liquidation preference.
Each share of preferred stock will have the right to vote together with the
Bank United common stock on all matters submitted generally to stockholders of
Bank United for a vote. In addition, the preferred stock will be entitled to
vote separately as a class with respect to specified matters affecting the
interests of preferred stockholders. Preferred stockholders will also be
entitled to elect two additional directors to the Bank United board of
directors, if Bank United fails to pay dividends on the preferred stock for six
quarters.
PAYMENTS TO CORPORATE PIES HOLDERS
As a holder of Corporate PIES, you will be entitled to receive cash
payments consisting of (1) payments under the purchase contract and (2) dividend
payments on the share of preferred stock at a combined rate of % per year.
o PAYMENTS UNDER THE PURCHASE CONTRACT. Bank United will pay you
quarterly contract adjustment payments of $ , which is equal
to % per annum of the $50 stated amount, on your purchase contract.
Bank United will pay the contract adjustment payments on ,
, and of each year. The first payment will
be made on , 1999, and the last payment will be made on
, 2002, unless your purchase contract is settled or
terminates before that date.
o DIVIDEND PAYMENTS ON THE PREFERRED STOCK. In addition, Bank United
will pay you quarterly cash dividend payments on your share of
preferred stock on the same dates that contract adjustment payments
are made. You will receive a dividend payment of $ each
quarter. This amount is equal to % per annum of the $50 liquidation
preference. Dividend payments will accumulate from , 1999
and will continue until , 2002. If you continue to own
your share of preferred stock after that date, then Bank United will
pay you dividends on your share, which will accumulate from ,
2002 until , 2004, at a reset rate that is described in
more detail starting on page S-38.
LIMITED VOTING RIGHTS
As a holder of Corporate PIES, you will have limited voting rights. Each
share of preferred stock you hold will carry .10 of a vote in connection with
matters submitted generally to the holders of the common stock of Bank United,
voting together as a single class with shares of the common stock and other
capital stock of Bank United entitled to vote in respect of matters submitted to
stockholders generally. In addition, as a holder of Bank United preferred stock
you will be entitled to vote in connection with specified amendments to the
certificate of incorporation of Bank United and as otherwise required by law.
You will not have any voting or other rights with respect to the common stock
until you pay the $50 purchase price and purchase the common stock.
PLEDGE ARRANGEMENT
When you purchase a Corporate PIES, you will pledge your share of Bank
United preferred stock that is a part of that Corporate PIES as collateral to
secure your obligation to purchase common stock on , 2002 under the
related purchase contract. Bank United has entered into a pledge agreement under
which The Bank of New York will act as collateral agent and hold your share of
preferred stock until the $50 purchase price has been paid for the common stock.
Even though your share of preferred stock will be pledged as collateral, you
will be the beneficial owner of that share of preferred stock.
S-6
<PAGE>
TREASURY PIES
Once you own Corporate PIES, you may create Treasury PIES by substituting
U.S. treasury securities for the preferred stock that is a part of the Corporate
PIES. A Treasury PIES will be a unit consisting of:
o a purchase contract for Bank United common stock that is identical to
the purchase contract that is a part of the Corporate PIES; and
o a 1/20 undivided beneficial ownership interest in a zero-coupon U.S.
treasury security that has a principal amount at maturity of $1,000
and matures on or earlier than the business day preceding the purchase
contract settlement date. We will refer to these treasury securities
as the "Treasury Securities."
TERMS OF SUBSTITUTION
You may substitute Treasury Securities for Bank United preferred stock at
any time on or before , 2002. This date is the seventh business day
preceding the purchase contract settlement date. Because the Treasury Security
has a principal amount at maturity of $1,000 and the Bank United preferred stock
has a liquidation preference of $50 per share, you must substitute Treasury PIES
for Corporate PIES in multiples of 20. In order to make a substitution, you
must:
o For each group of 20 Corporate PIES you wish to substitute, transfer a
Treasury Security to The Bank of New York, which is acting as the
securities intermediary under the pledge arrangement. The securities
intermediary then will deposit the Treasury Security in the collateral
account maintained under the pledge arrangement. The Treasury Security
will become the collateral supporting your obligation to purchase the
common stock, and the collateral agent will then release shares of
preferred stock with an aggregate liquidation preference of $1,000
from the pledge. Those shares of preferred stock will then be freely
tradable and will not be a part of any PIES.
o Submit your Corporate PIES in multiples of 20. For each group of 20
Corporate PIES you submit, you will receive 20 Treasury PIES.
o Pay to the collateral agent any fees or expenses incurred in
connection with the substitution.
PAYMENTS TO TREASURY PIES HOLDERS
If you substitute Treasury PIES for Corporate PIES, you will continue to
receive purchase contract adjustment payments under your purchase contract, but
you will not receive any other distributions on the Treasury PIES. Instead, you
will receive accrued original issue discount on the Treasury Securities that you
deposited with the securities intermediary. As long as you continue to own the
shares of preferred stock that had been a part of your Corporate PIES, you will
receive dividend payments on them, separately from the Treasury PIES.
RECREATING CORPORATE PIES
Once you have created Treasury PIES, you may subsequently recreate
Corporate PIES at any time on or prior to , 2002. Because
the Treasury Security has a principal amount at maturity of $1,000 and the Bank
United preferred stock has a liquidation preference of $50 per share, you must
recreate Corporate PIES from Treasury PIES in multiples of 20. In order to
recreate Corporate PIES, you must:
o For each group of 20 Corporate PIES to be recreated, transfer shares
of preferred stock with an aggregate liquidation preference of $1,000
to the securities intermediary. The securities intermediary then will
deposit those shares in the collateral account maintained under the
pledge arrangement. The shares of preferred stock with an aggregate
liquidation preference of
S-7
<PAGE>
$1,000 will become the collateral supporting your obligation to
purchase the common stock, and then the collateral agent will release
the Treasury Security from the pledge. That Treasury Security will be
freely tradable and will not be a part of any PIES.
o Submit your Treasury PIES in multiples of 20. For each group of 20
Treasury PIES you submit, you will receive 20 Corporate PIES.
o Pay to the collateral agent any fees or expenses incurred in
connection with the substitution.
SETTLEMENT OF PURCHASE CONTRACTS; REMARKETING
CORPORATE PIES
For each purchase contract that is a part of your Corporate PIES, you will
be obligated to pay, on , 2002, $50 to purchase Bank United
common stock. You may choose to deliver a cash payment of $50, or, if you do
not, your share of Bank United preferred stock held as collateral under the
pledge arrangement will be sold to the public for $50. We call this the
"remarketing." The proceeds from the remarketed share of preferred stock will
be used to pay the amount due under your purchase contract. Bank United will be
responsible for all costs and expenses incurred in connection with the
remarketing.
REMARKETING OF PREFERRED STOCK
On , 2002, which is the third business day preceding the
purchase contract settlement date, Lehman Brothers will remarket:
o the preferred stock that is a part of Corporate PIES, if the holders
of those Corporate PIES either (1) elect to have their preferred stock
remarketed or (2) fail to deliver cash payments for the common stock
when those payments are due under the purchase contract; and
o preferred stock that is not a part of Corporate PIES, including as a
result of the creation of Treasury PIES, to the extent the holders of
the preferred stock elect to have the preferred stock remarketed.
After the preferred stock has been remarketed, the dividend payments on all
outstanding shares of preferred stock, including those shares that were not
remarketed, will be those determined by the remarketing. If Lehman Brothers
cannot remarket the preferred stock, the dividend payments will be equal to a
60-day "AA" composite commercial paper rate plus a spread ranging from 300 to
700 basis points depending on the credit ratings of the preferred stock at that
time.
REMARKETING PROCEDURES
Your preferred stock will be remarketed:
(1) if you do not notify the purchase contract agent that you will
pay cash for the common stock by 5:00 p.m., New York City time, on
, 2002, which is the seventh business day preceding the
purchase contract settlement date; or
(2) if you notify the purchase contract agent that you will pay cash
but you do not deliver the cash by 11:00 a.m., New York City time, on or
before , 2002, which is the fifth business day preceding
the purchase contract settlement date.
o On , 2002, Lehman Brothers will use commercially
reasonable efforts to sell your preferred stock, together with all
other preferred stock being remarketed, at a price of $50.25 per
share.
o If the remarketing is successful, then:
S-8
<PAGE>
o Your shares of preferred stock will be sold, and the dividend payments
on the preferred stock will be reset to be the lowest rate that Lehman
Brothers determined was necessary to allow it to remarket the
preferred stock at a price of $50.25 per share.
o $50 per share of preferred stock received from the sale will be
delivered to Bank United as payment for the common stock.
o $0.25 per share of preferred stock received from the sale will be paid
to the remarketing agent.
o You will receive the shares of Bank United common stock.
FAILED REMARKETING
If Lehman Brothers cannot remarket the preferred stock, then Bank United
will be entitled to exercise its rights as a secured party and take possession
of your shares of preferred stock. Your obligation to purchase the common stock
will then be fully satisfied, and you will receive the shares of common stock.
CASH PAYMENT IN LIEU OF REMARKETING
If you choose not to participate in the remarketing and instead pay cash
for your shares of common stock, then:
o Bank United will receive $50 in cash from you for each of your
purchase contracts.
o You will receive the shares of common stock.
o Your shares of preferred stock will be released from the pledge
arrangement and distributed to you. Starting on the date of settlement
and continuing until , 2004, dividend payments on
the preferred stock will be payable at the new rate determined by
Lehman Brothers in the remarketing.
SETTLEMENT OF TREASURY PIES
Unless you notify the purchase contract agent that you will pay for the
common stock with cash, upon settlement of the Treasury PIES, Bank United will
receive the proceeds of the Treasury Securities being held as collateral under
the pledge arrangement. This will satisfy your obligation to deliver the
purchase price for the common stock, and you will receive the shares of common
stock.
NUMBER OF SHARES OF COMMON STOCK PURCHASED
Unless you elect to settle your purchase contracts early (see "Description
of the Purchase Contracts -- Early settlement" starting on page S-29), the
number of shares of common stock you will receive under each purchase contract
will depend on the average of the closing price per share, or the last reported
sale price, if no closing price is reported, of the common stock as reported on
the Nasdaq National Market for a period of 20 trading days ending on
, 2002. This date is the third trading day preceding the
purchase contract settlement date. If, for any trading day, the trading of the
common stock is suspended, or if the common stock does not trade at least once
on the Nasdaq National Market on that day, then that day will not be considered
to be part of the 20-trading day period.
The number of shares of common stock you will receive for each Corporate
PIES will be determined by one of the following settlement rates:
o If the average closing price during the relevant 20-trading day period
equals or exceeds $ , you will receive shares of common
stock.
S-9
<PAGE>
o If the average closing price during that period is less than $ but
greater than $ , you will receive a number of shares of common
stock equal to $50 divided by the average closing price, rounded
upward or downward to the nearest 1/10,000th of a share.
o If the average closing price during that period is less than or equal
to $ , you will receive shares of common stock.
In some circumstances, the applicable settlement rate will be subject to
adjustment. You can find more information about the settlement rate starting on
page S-31.
Bank United will not issue any fractional shares of common stock. If,
however, you are settling more than one purchase contract, then any fractional
shares of common stock will be aggregated. For any fractional share not
issuable, Bank United will pay you the value of that fractional share in cash.
EARLY SETTLEMENT
You may satisfy your obligation to purchase common stock under your
purchase contract before the purchase contract settlement date on
, 2002. If you choose early settlement, you will pay $50 in
cash on or before:
(1) , 2002, if you are settling Corporate PIES;
this date is the seventh business day preceding the purchase contract
settlement date, or
(2) , 2002, if you are settling Treasury PIES; this
date is the second business day preceding the purchase contract settlement
date.
To effect early settlement:
o You must deliver to the purchase contract agent a notice indicating
your election to "settle early;" and
o You must deliver a cash payment of $50 for each purchase contract you
wish to settle.
You will receive, for each Corporate PIES or Treasury PIES you surrender,
both:
o shares of common stock, regardless of the market price of the
common stock on the date of early settlement and subject to adjustment
in certain circumstances; and
o Your share of preferred stock if you are settling a Corporate PIES or
a 1/20 undivided beneficial interest in a Treasury Security if you are
settling Treasury PIES.
You will not receive any further contract adjustment payments from Bank
United.
You may settle Treasury PIES early only in multiples of 20.
TERMINATION OF PURCHASE CONTRACTS
The purchase contracts will terminate immediately and automatically if
certain bankruptcy, insolvency or reorganization events occur with respect to
Bank United. If the purchase contracts terminate upon one of these events, then
your rights and obligations under your purchase contracts also will terminate,
including your right to receive accrued contract adjustment payments and your
obligation to pay for, and your right to receive, shares of common stock. Upon
termination, you will receive your share of Bank United preferred stock or your
Treasury Security. If Bank United becomes the subject of a bankruptcy case, then
there may be a delay between the time the purchase contracts terminate and the
time you receive your pledged share of preferred stock, in the case of Corporate
PIES, or Treasury Security, in the case of Treasury PIES. You may find more
information about how the purchase contracts terminate on page S-32.
S-10
<PAGE>
CONCURRENT OFFERING
We are also offering, in a concurrent offering, 2,000,000 shares of a
different series of our preferred stock with a liquidation preference of $50 per
share. Dividends on the preferred stock of that series will be payable
quarterly, at a fixed annual rate. The preferred stock of that series will be
subject to mandatory redemption in full on the fifth anniversary of its issue
date at a redemption price equal to 100% of its liquidation preference plus
dividends accrued to the redemption date.
LISTING ON NYSE
The common stock of Bank United is traded on the Nasdaq National Market
under the ticker symbol "BNKU." We have applied to list the Corporate PIES on
the NYSE. If either the Treasury PIES or the preferred stock are traded at a
volume that satisfies applicable listing requirements, then Bank United will try
to list those securities on the national securities exchanges or associations on
which the Corporate PIES are then listed or quoted.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
Because a Corporate PIES will consist of a share of Bank United preferred
stock and a purchase contract, the purchase price of each Corporate PIES will be
allocated between the purchase contract and the related share of preferred stock
in proportion to their relative fair market values at the time of purchase.
We intend to report the contract adjustment payments as income to you, but
you may want to consult your tax advisor concerning alternative
characterizations.
If you own Corporate PIES, you will include in gross income the dividend
received on the preferred stock.
If you own Treasury PIES, you will be required to include in gross income
your allocable share of any original issue discount or acquisition discount on
the Treasury Securities that accrues in each year.
Because there is no statutory, judicial or administrative authority
directly addressing the tax treatment of the PIES or instruments similar to the
PIES, we urge you to consult your own tax advisor concerning the tax
consequences of an investment in the PIES. For additional information, see
"United States Federal Income Tax Consequences" starting on page S-44.
USE OF PROCEEDS
The estimated net proceeds from the sale of the Corporate PIES, after
deducting underwriting discounts and estimated fees and expenses, are expected
to be approximately $ , or $ if the underwriter's over-allotment option
is exercised in full. See "Use of Proceeds" on page S-20. Bank United will use
these net proceeds for general corporate purposes which may include enhancing
the equity capital of its bank subsidiary.
SELECTED FINANCIAL DATA OF BANK UNITED
The following selected financial data for each of the years ended September
30, 1994 through 1998 are derived from the audited consolidated financial
statements of Bank United. The following selected financial data for the six
months ended March 31, 1999 and March 31, 1998 are derived from the unaudited
consolidated financial statements of Bank United and include, in the opinion of
the management of Bank United, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the data of those periods.
The information that appears below is only a summary and should be read in
conjunction with the consolidated financial statements, the notes to
S-11
<PAGE>
those financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated by reference into
this prospectus supplement.
In reading the following selected financial information for Bank United,
please note the following:
o During fiscal 1997, Bank United sold some of its mortgage origination
offices. In connection with this sale, the remaining offices were
restructured or closed. The mortgage origination branches shown at
March 31, 1999 and 1998 and September 30, 1998 and 1997 are wholesale
mortgage origination offices, which are currently part of the
Financial Markets Group. See "Sale of mortgage offices" and
"Restructuring charges" items in the Summary of Operations.
o In connection with its acquisition, Bank United issued to the Federal
Deposit Insurance Corporation, as manager of the Federal Savings and
Loan Insurance Corporation Resolution Trust Fund, a warrant to acquire
158,823 shares of common stock of Bank United. Payments in lieu of
dividends related to the warrant, which was redeemed in August 1996.
See "Payments in lieu of dividends" item in the Summary of
Operations.
o The extraordinary loss appearing under "Extraordinary loss -- early
extinguishment of debt" in the Summary of Operations represents costs
and charges associated with the repurchase and retirement of a
majority of the senior notes of Bank United.
o Effective October 1, 1997, Bank United adopted Statement of Financial
Accounting Standard ("SFAS") No. 128, "Earnings per share," which
establishes standards for computing and presenting earnings per share
("EPS"). It requires dual presentation of basic and diluted EPS for
entities with complex capital structures. All prior period EPS data
were restated to comply with SFAS No. 128, but are not materially
different. See "Earnings per common share" item in the Summary of
Operations.
o "Return on average assets" under Certain Ratios and Other Data is
net income without deduction of minority interest, divided by average
total assets.
o "Net operating expense ratio" under Certain Ratios and Other Data is
total non-interest expense, less total non-interest income, as a
percentage of average assets for each period.
o "Efficiency ratio" under Certain Ratios and Other Data is
non-interest expense excluding goodwill amortization, divided by net
interest income plus non-interest income, excluding the gain on the
sale of mortgage offices.
o Adjusting items under Certain Ratios and Other Data -- Excluding
Adjusting Item are composed of the following for fiscal 1999, 1998,
1997, 1996 and 1994:
o 1999, decreased EPS $0.08: court of claims litigation expense
totaling $4.1 million, $2.6 million net of tax;
o 1998, increased EPS $0.76:
(1) two positive income tax adjustments totaling $33.5 million,
(2) an increase in the commercial loan allowance of $7.8 million,
$4.9 million net of tax and
(3) provisions for the impact of higher prepayments on the single
family loan and servicing portfolios totaling $6.7 million, $4.2
million net of tax;
o 1997, increased EPS $0.02:
(1) the gain on the sale of mortgage offices of $4.7 million, $2.9
million net of tax and
S-12
<PAGE>
(2) an extraordinary loss on extinguishment of debt of $3.6 million,
$2.3 million net of tax.
o 1996, increased EPS $2.05:
(1) a one-time SAIF assessment charge of $33.7 million, $20.7
million net of tax,
(2) compensation expense of $7.8 million, $4.8 million net of tax,
(3) charges totaling $12.5 million, $7.7 million net of tax, related
to the restructuring of and items associated with the mortgage
origination business,
(4) a contractual payment to previous minority interests of $5.9
million, and
(5) an income tax benefit of $101.7 million.
o 1994, increased EPS $1.90: an income tax benefit of $58.2 million.
S-13
<PAGE>
<TABLE>
<CAPTION>
AT MARCH 31, AT SEPTEMBER 30,
------------- ----------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
SUMMARY OF FINANCIAL CONDITION
ASSETS:
Cash and cash equivalents............ $ 237,251 $ 228,674 $ 121,000 $ 119,523 $ 112,931 $ 76,938
Securities purchased under
agreements to resell and federal
funds sold....................... 411,529 474,483 349,209 674,249 471,052 358,710
Securities and other investments... 124,373 91,350 77,809 65,693 117,094 115,126
Mortgage-backed securities, net.... 1,168,958 932,058 1,569,705 1,657,908 2,398,263 2,828,903
Loans, net
Single family-held for
investment..................... 4,978,688 4,686,600 5,795,179 6,113,318 7,000,303 4,144,787
Single family-held for sale...... 1,571,433 2,149,009 697,410 256,656 406,563 253,310
Commercial....................... 4,480,710 3,472,579 2,201,880 981,001 735,876 546,794
Consumer......................... 576,777 495,556 300,760 168,513 117,498 101,283
Mortgage servicing rights.......... 431,746 410,868 272,214 123,392 75,097 56,677
Other assets....................... 893,301 723,815 581,906 552,124 548,857 427,633
------------- ---------- ---------- ---------- ---------- ----------
Total assets..................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============= ========== ========== ========== ========== ==========
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Deposits........................... $ 6,605,548 $6,320,476 $5,247,668 $5,147,945 $5,182,220 $4,764,204
Federal Home Loan Bank advances.... 5,744,594 4,783,294 3,992,344 3,490,386 4,383,895 2,620,329
Securities sold under agreements to
repurchase and federal fund
purchased........................ 576,007 811,742 1,308,600 832,286 1,172,533 553,000
Notes payable...................... 368,715 219,720 220,199 115,000 115,000 115,000
Other liabilities.................. 671,426 659,848 414,282 410,217 448,283 320,766
------------- ---------- ---------- ---------- ---------- ----------
Total liabilities................ 13,966,290 12,795,080 11,183,093 9,995,834 11,301,931 8,373,299
------------- ---------- ---------- ---------- ---------- ----------
Minority interest-Bank preferred
stock............................ 185,500 185,500 185,500 185,500 185,500 85,500
Stockholders' equity............... 722,976 684,412 598,479 531,043 496,103 451,362
------------- ---------- ---------- ---------- ---------- ----------
Total liabilities, minority
interest and stockholders'
equity......................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============= ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income...................... $ 478,775 $ 442,581 $ 898,746 $ 810,708 $ 812,312 $ 746,759 $ 494,706
Interest expense..................... 319,172 303,179 612,665 546,064 584,778 552,760 320,924
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net interest income................ 159,603 139,402 286,081 264,644 227,534 193,999 173,782
Provisions for credit losses......... 12,384 14,963 20,123 18,107 16,469 24,293 6,997
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net interest income after
provision for credit losses.... 147,219 124,439 265,958 246,537 211,065 169,706 166,785
Non-interest income
Net gains (losses)
Sales of single family servicing
rights and single family
loans.......................... 13,175 2,541 11,124 21,182 43,074 60,495 63,286
Securities and mortgage-backed
securities..................... 785 1,801 2,761 2,841 4,002 26 10,404
Other loans...................... 1,027 376 651 1,128 3,189 (1,210) 163
Sale of mortgage offices......... -- -- -- 4,748 -- -- --
</TABLE>
(TABLE CONTINUED ON NEXT PAGE)
S-14
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Loan servicing, net of related
amortization..................... 27,598 13,459 35,975 32,381 30,383 32,677 26,813
Other.............................. 18,711 13,280 30,426 21,152 15,541 12,162 13,295
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total non-interest income.......... 61,296 31,457 80,937 83,432 96,189 104,150 113,961
---------- ---------- ---------- ---------- ---------- ---------- ---------
Non-interest expense
Compensation and benefits.......... 47,125 39,625 86,725 75,016 87,640 83,520 86,504
SAIF deposit insurance premiums.... 2,010 1,927 4,160 4,797 45,690 11,428 11,329
Court of Claims litigation......... 4,077 900 1,800 -- -- -- --
Restructuring charges.............. -- -- -- -- 10,681 -- --
Other.............................. 56,326 45,795 95,857 92,323 95,407 88,797 96,832
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total non-interest expense......... 109,538 88,247 188,542 172,136 239,418 183,745 194,665
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before income taxes,
minority interest, and
extraordinary loss............... 98,977 67,649 158,353 157,833 67,836 90,111 86,081
Income tax expense (benefit)......... 37,365 (8,209) 25,722 60,686 (75,765) 37,415 (31,899)
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before minority interest and
extraordinary loss............... 61,612 75,858 132,631 97,147 143,601 52,696 117,980
Minority interest
Bank preferred stock dividends..... 9,126 9,126 18,253 18,253 18,253 10,600 8,653
Payments in lieu of dividends...... -- -- -- -- 6,413 377 357
---------- ---------- ---------- ---------- ---------- ---------- ---------
Income before extraordinary loss... 52,486 66,732 114,378 78,894 118,935 41,719 108,970
Extraordinary loss -- early
extinguishment of debt............. -- -- -- 2,323 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net income......................... $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 118,935 $ 41,719 $ 108,970
========== ========== ========== ========== ========== ========== =========
Net income applicable to diluted
earnings per common share........ $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 113,327 $ 38,824 $ 102,519
========== ========== ========== ========== ========== ========== =========
Earnings per common share
Basic.............................. $ 1.66 $ 2.11 $ 3.62 $ 2.42 $ 4.06 $ 1.45 $ 3.78
Diluted............................ 1.63 2.06 3.54 2.40 3.87 1.35 3.55
CERTAIN RATIOS AND OTHER DATA
Book value per common share.......... $ 22.91 $ 20.67 $ 21.67 $ 18.94 $ 16.81 $ 17.19 $ 15.64
Dividends per common share........... 0.32 0.32 0.64 0.56 3.16 -- --
Average common shares outstanding.... 31,565 31,596 31,595 31,596 29,260 28,863 28,863
Average common shares and potential
dilutive common shares............. 32,172 32,316 32,337 31,881 29,287 28,863 28,863
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Regulatory capital ratios of Bank
United
Tangible capital................... 6.73% 7.02% 6.75% 7.72% 6.57% 6.20% 6.01%
Core capital....................... 6.75% 7.06% 6.77% 7.77% 6.64% 6.29% 6.17%
Total risk-based capital........... 11.92% 11.59% 10.48% 13.18% 13.09% 13.45% 14.02%
Return on average assets............. 0.86% 1.23% l.04% 0.85% 1.28% 0.50% 1.42%
Return on average common equity...... 14.91% 21.68% 17.78% 13.50% 23.06% 8.80% 26.32%
Stockholders' equity to assets....... 4.86% 4.98% 5.01% 5.00% 4.96% 4.14% 5.07%
Tangible stockholders' equity to
tangible assets.................... 4.30% 4.52% 4.59% 4.89% 4.81% 3.93% 4.68%
</TABLE>
(TABLE CONTINUED ON NEXT PAGE)
S-15
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net yield on interest-earning
assets............................. 2.41% 2.42% 2.42% 2.52% 2.10% 1.92% 2.20%
Interest rate spread................. 2.23% 2.20% 2.21% 2.26% 1.78% 1.61% 1.95%
Average interest-earning assets to
average interest-bearing
liabilities........................ 1.03 1.04 1.04 1.05 1.06 1.06 1.06
Single family servicing portfolio.... $27,303,981 $23,887,887 $27,935,300 $24,518,396 $13,246,848 $12,532,472 $8,920,760
Fundings:
Single family...................... 2,399,057 1,959,019 3,789,389 2,188,273 3,602,009 3,226,324 5,424,550
Commercial......................... 2,040,570 1,219,141 2,876,328 1,492,931 891,306 547,117 364,604
Consumer........................... 142,620 180,030 367,097 152,665 125,596 99,249 94,153
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total fundings....................... 4,582,247 3,358,190 7,032,814 3,833,869 4,618,911 3,872,690 5,883,307
---------- ---------- ---------- ---------- ---------- ---------- ---------
Loans purchased for held to maturity
portfolio.......................... 1,021,884 183,509 1,158,270 1,086,249 148,510 2,658,093 1,406,275
Non-interest expense to average total
assets............................. 1.53% 1.43% 1.48% 1.55% 2.13% 1.76% 2.35%
Net operating expense ratio.......... 0.67 0.92 0.84 0.80 1.28 0.76 0.97
Efficiency ratio..................... 48.36 50.39 49.88 49.20 72.23 58.26 63.36
Nonperforming assets to total
assets............................. 0.62 0.63 0.59 0.63 1.12 0.84 1.09
Net nonaccrual loans to total
loans.............................. 0.54 0.62 0.57 0.60 1.19 0.91 1.51
Allowance for credit losses to net
nonaccrual loans................... 93.34 71.44 75.91 72.61 44.24 48.74 30.73
Allowance for credit losses to
nonperforming assets............... 64.06 54.76 57.84 52.24 32.95 36.65 24.18
Allowance for credit losses to total
loans.............................. 0.50 0.44 0.44 0.43 0.52 0.44 0.46
Net loan charge-offs to average
loans.............................. 0.06 0.20 0.13 0.23 0.17 0.16 0.30
Full-time equivalent employees....... 2,234 1,689 1,927 1,541 2,310 2,663 2.894
Number of community banking
branches........................... 94 80 84 71 70 65 62
Number of commercial banking
origination offices................ 19 15 19 11 9 9 5
Number of mortgage origination
offices............................ 9 6 8 6 85 122 145
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CERTAIN RATIOS AND OTHER DATA --
EXCLUDING ADJUSTING ITEM
Net income........................... $ 55,036 $ 42,298 $ 89,944 $ 75,970 $ 56,392 $ 41,719 $ 50,804
Net income applicable to diluted
earnings per common shares......... 55,036 42,298 89,944 75,970 53,295 38,824 47,585
Earnings per diluted share........... 1.71 1.31 2.78 2.38 1.82 1.35 1.65
Return on average assets............. 0.89% 0.83% 0.85% 0.85% 0.67% 0.50% 0.72%
Return on average common equity...... 15.61 13.82 14.28 13.41 11.47 8.80 12.27
Efficiency ratio..................... 46.52 48.48 48.98 49.20 55.80 58.26 63.36
</TABLE>
S-16
<PAGE>
RISK FACTORS
AN INVESTMENT IN PIES INVOLVES A NUMBER OF RISKS. BEFORE DECIDING TO BUY
ANY PIES, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING INFORMATION, TOGETHER WITH
THE OTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND THE DOCUMENTS THAT ARE INCORPORATED BY REFERENCE IN THE ACCOMPANYING
PROSPECTUS ABOUT RISKS CONCERNING AN INVESTMENT IN PIES.
THE CORPORATE PIES CONSIST OF SHARES OF PREFERRED STOCK OF BANK UNITED AND
PURCHASE CONTRACTS TO ACQUIRE BANK UNITED COMMON STOCK. WHEN CONSIDERING AN
INVESTMENT IN CORPORATE PIES, YOU ARE MAKING AN INVESTMENT DECISION WITH REGARD
TO THE COMMON STOCK AND THE PREFERRED STOCK AS WELL AS THE CORPORATE PIES. YOU
SHOULD CAREFULLY REVIEW THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS ABOUT ALL THESE SECURITIES.
RISK FACTORS RELATING TO THE PIES
THE NUMBER OF SHARES OF COMMON STOCK YOU WILL RECEIVE UNDER A PURCHASE
CONTRACT WILL DEPEND ON FUTURE COMMON STOCK PRICE; YOU WILL BEAR THE RISK OF
DECLINE IN EQUITY VALUE
The terms of the PIES differ from those of ordinary convertible securities.
The number of shares of common stock that you will receive upon the settlement
of a purchase contract is not fixed, but instead will depend on the market value
of the common stock near the time of settlement. The aggregate market value of
the common stock you may receive upon settlement of the purchase contract may be
more or less than the stated amount of $50 per PIES. If the market value of the
common stock near the time of settlement is less than $ , the aggregate
market value of the common stock issuable upon settlement generally will be less
than $50, and the investment in the PIES will result in a loss. Therefore, you
will bear the full risk of a decline in the market value of the common stock
prior to settlement of the purchase contracts.
OPPORTUNITY FOR EQUITY APPRECIATION IS LESS THAN COMMON STOCK OWNERSHIP
The market value of the common stock you may receive upon settlement of a
purchase contract generally will exceed the stated amount of $50 only if the
average closing price of the common stock over the 20-trading day period
preceding settlement equals or exceeds $ , which we call the "Threshold
Appreciation Price." The Threshold Appreciation Price represents an
appreciation of % over the current market price. Therefore, during the period
prior to settlement, an investment in the PIES affords less opportunity for
equity appreciation than a direct investment in the common stock. If the
applicable average closing price exceeds $ , which we call the "Reference
Price," but falls below the Threshold Appreciation Price, you will realize no
equity appreciation on the common stock for the period during which you own the
purchase contract. Furthermore, if the applicable average closing price equals
or exceeds the Threshold Appreciation Price, you will realize only % of the
equity appreciation for that period above the Threshold Appreciation Price. See
"Description of the Purchase Contracts -- General" starting on page S-26 for
an illustration of the number of shares of common stock that you would receive
at various average closing prices.
MARKET PRICE FOR THE COMMON STOCK IS UNCERTAIN
It is impossible to know whether the market price of the common stock will
rise or fall. Numerous factors influence the trading prices of the common stock.
These factors include changes in Bank United's financial condition, results of
operations and prospects and complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges or automated quotation systems on which the common stock is
traded and the market segments of which Bank United is a part.
The market for the common stock likely will influence, and be influenced
by, any market that develops for the PIES. For example, investors' anticipation
of the distribution into the market of substantial amounts of common stock,
including the additional common stock issuable upon settlement of the purchase
contracts, could depress the price of the common stock and increase their
volatility. If
S-17
<PAGE>
the underwriter's over-allotment option is exercised in full, the largest number
of shares of common stock issuable upon settlement of the purchase contracts
would constitute approximately % of the common stock outstanding as of
, 1999. The price of the common stock also could be affected
by possible sales of the common stock by investors who view the PIES as a more
attractive means of equity participation in Bank United and by hedging or
arbitrage trading activity that may develop involving the PIES and the common
stock. See " -- Arbitrage opportunities may affect market prices of PIES,
preferred stock and common stock" below.
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON SETTLEMENT OF PURCHASE
CONTRACTS WILL BE ADJUSTED ONLY FOR CERTAIN SPECIFIED TRANSACTIONS
The number of shares of common stock issuable upon settlement of each
purchase contract is subject to adjustment only for stock splits and
combinations, stock dividends and certain other specified transactions involving
Bank United. See "Description of the Purchase Contracts -- Anti-dilution
adjustments" starting on page S-31. The number of shares of common stock
issuable upon settlement of each purchase contract is not subject to adjustment
for other events, such as employee stock option grants, offerings of common
stock for cash or in connection with acquisitions or certain other transactions
involving Bank United, which may adversely affect the price of the common stock.
The terms of the PIES do not restrict the ability of Bank United to offer common
stock in the future or to engage in other transactions that could dilute the
common stock. Bank United has no obligation to consider the interests of the
holders of the PIES for any reason.
YOU WILL HAVE NO RIGHTS AS COMMON STOCKHOLDERS
Until you acquire common stock upon settlement of your purchase contract,
you will have no rights with respect to the common stock, including voting
rights, rights to respond to tender offers and rights to receive any dividends
or other distributions on the common stock. Upon settlement of your purchase
contract, you will be entitled to exercise the rights of a holder of common
stock only as to actions for which the applicable record date occurs after the
settlement date.
FIXED YIELD ON THE PIES COULD BE LESS THAN DIVIDEND YIELD ON THE COMMON
STOCK
There can be no assurance that the yield on the PIES will remain higher
than the dividend yield on the common stock. You will be entitled to receive
aggregate quarterly cash distributions at the rate of % of the $50 stated
amount of the Corporate PIES per annum, consisting of contract adjustment
payments of $ and cash dividend payments on the related shares of
preferred stock of $ . Bank United currently pays cash dividends at the
rate of $ per share per year. That rate is equivalent to % of the
$ Reference Price per year. See "Price Range of Common Stock and Dividend
Policy."
TRADING MARKETS FOR PIES AND PREFERRED STOCK ARE SUBJECT TO UNCERTAINTIES
It is impossible to predict how the Corporate PIES, the Treasury PIES and
the preferred stock will trade in the secondary market or whether the market for
any of these securities will be liquid or illiquid. The Corporate PIES and the
Treasury PIES are novel securities. There currently is no secondary market for
either of them or for the preferred stock, and there can be no assurance as to
the liquidity of any trading market that may develop, the ability of holders to
sell their securities in that market or whether any such market will continue.
We have applied to have the Corporate PIES listed on the NYSE. However,
listing on the NYSE does not guarantee the depth or liquidity of the market for
Corporate PIES. If holders of the Corporate PIES convert their Corporate PIES
into Treasury PIES by substituting Treasury Securities for the preferred stock,
the liquidity of the Corporate PIES could be adversely affected. Moreover, if
the number of Corporate PIES falls below the requirement of the NYSE for
continued listing, whether as a result of the conversion of Corporate PIES into
Treasury PIES or otherwise, the Corporate PIES could be delisted from the NYSE,
or trading in the Corporate PIES could be suspended.
S-18
<PAGE>
ARBITRAGE OPPORTUNITIES MAY AFFECT MARKET PRICES OF PIES, PREFERRED STOCK
AND COMMON STOCK
Fluctuations in interest rates may create opportunities for arbitrage based
upon changes in the relative value of the common stock underlying the purchase
contracts and of the components of the PIES. Any arbitrage could affect, in
turn, the trading prices of the PIES, the preferred stock and the common stock.
YOUR PLEDGED SECURITIES WILL BE ENCUMBERED
Although holders of PIES will be beneficial owners of the underlying
pledged shares of preferred stock, in the case of Corporate PIES, and pledged
Treasury Securities, in the case of Treasury PIES, those pledged securities will
be pledged to secure the obligations of the holders under the purchase
contracts. Therefore, for so long as the purchase contracts remain in effect,
holders will not be allowed to withdraw their pledged securities from this
pledge agreement except in the limited circumstances described in this
prospectus supplement.
DELIVERY OF SECURITIES IS SUBJECT TO POTENTIAL DELAY IF BANK UNITED BECOMES
SUBJECT TO A BANKRUPTCY PROCEEDING
Notwithstanding the automatic termination of the purchase contracts, if
Bank United becomes the subject of a case under the Bankruptcy Code, imposition
of an automatic stay under Section 362 of the Bankruptcy Code may delay the
delivery to you of your securities being held as collateral under the pledge
arrangement.
PURCHASE CONTRACT AGENT HAS LIMITED OBLIGATIONS TO YOU
The purchase contract agent will have only limited obligations to you as a
holder of the PIES under the terms of the purchase contract agreement. The
purchase contract agreement is not an indenture under the Trust Indenture Act of
1939. Therefore, the purchase contract agent will not qualify as a trustee under
the Trust Indenture Act, and you will not benefit from the protections of that
law, such as disqualification of an indenture trustee for "conflicting
interests," provisions preventing an indenture trustee from improving its own
position at the expense of the security holders and the requirement that an
indenture trustee deliver reports at least annually with respect to the
indenture trustee and the securities. See "Certain Provisions of the Purchase
Contracts, the Purchase Contract Agreement and the Pledge
Agreement -- Information concerning the purchase contract agent" on page S-35.
BANK UNITED IS A HOLDING COMPANY AND WILL DEPEND ON DISTRIBUTIONS FROM ITS
BANK SUBSIDIARY TO ENABLE IT TO MEET ITS FINANCIAL OBLIGATIONS
Bank United, through a subsidiary, owns all the outstanding common stock of
its bank subsidiary. As a holding company without significant assets other than
its indirect ownership of all the common stock of its bank subsidiary, the
ability of Bank United to meet its cash obligations, including debt service, is
dependent upon the payment of dividends by its bank subsidiary on its common
stock. The declaration of dividends by the bank subsidiary is subject to the
discretion of the board of directors of the bank subsidiary, the terms of the
outstanding preferred stock of the bank subsidiary and applicable regulatory
requirements. While it is the present intention of the board of directors of the
bank subsidiary to declare dividends in an amount sufficient to provide Bank
United with the cash flow necessary to meet the obligations of Bank United, we
cannot assure you that circumstances which would limit or preclude the
declaration of dividends by the bank subsidiary on its common stock will not
exist in the future.
S-19
<PAGE>
USE OF PROCEEDS
The net proceeds that will be received from the sale of the Corporate PIES,
after deducting the underwriting discounts and estimated fees and expenses, will
be approximately $ , or approximately $ if the underwriter's
over-allotment option is exercised in full. See "Underwriting" starting on
page S-51. Bank United will use the net proceeds for general corporate purposes
that may include enhancing the equity capital of its bank subsidiary.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The common stock is listed on the Nasdaq National Market under the symbol
"BNKU." The following table shows, for the fiscal quarters for the year ended
September 30 as indicated, the reported high and low sale prices as reported on
the Nasdaq National Market and the cash dividends declared on the common stock
for the periods indicated.
<TABLE>
<CAPTION>
PRICE RANGE HIGH LOW DIVIDENDS
- ------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
1997
First Quarter................... $ 28.750 $ 23.375 $ 0.140
Second Quarter.................. 33.500 24.250 0.140
Third Quarter................... 39.000 28.125 0.140
Fourth Quarter.................. 44.500 35.375 0.140
1998
First Quarter................... 49.875 40.000 0.160
Second Quarter.................. 50.000 37.250 0.160
Third Quarter................... 56.500 44.500 0.160
Fourth Quarter.................. 49.750 30.000 0.160
1999
First Quarter................... 45.500 23.625 0.160
Second Quarter.................. 43.313 38.250 0.160
Third Quarter................... 44.000 38.250 0.185
Fourth Quarter (through August
, 1999).....................
</TABLE>
On , 1999, the last reported sale price of the common
stock on the Nasdaq National Market was $ per share.
We have paid dividends on our common stock each quarter since our initial
public offering in August 1996. The payment of dividends is at the discretion of
our board of directors. We have subordinated debt outstanding that would
restrict our ability to pay dividends if we or any subsidiary was not in
compliance with any minimum capital maintenance requirement established by the
Federal Reserve Board or another banking regulator applicable to us or any
subsidiary.
S-20
<PAGE>
CAPITALIZATION
The following table shows the capitalization of Bank United as of March 31,
1999 and as adjusted to reflect (1) the offering of the Corporate PIES and (2)
the concurrent offering of shares of a series of redeemable preferred stock. In
addition to the long-term debt of Bank United reflected below at March 31, 1999,
the Bank had long-term borrowings consisting of deposits, FHLB advances, and
certain other funding liabilities incurred in the ordinary course of business.
<TABLE>
<CAPTION>
AT MARCH 31, 1999
---------------------------
HISTORICAL AS ADJUSTED
---------- -----------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
Long-term debt(1).................... $ 368,715 $ 368,715
Redeemable preferred stock........... -- 200,000
Minority Interest -- Preferred Stock
of the bank subsidiary(2).......... 185,500 185,500
Stockholders' equity:
Preferred stock(3).............. -- --
Common stock.................... 316 316
Paid-in capital................. 129,343 126,643
Retained earnings............... 599,088 599,088
Accumulated other comprehensive
income-unrealized gains
(losses) on securities
available for sale, net of
tax............................ (4,708) (4,708)
Treasury stock, at cost......... (1,063) (1,063)
---------- -----------
Total stockholders' equity...... 722,976 720,276
---------- -----------
Total consolidated
capitalization......... $1,277,191 $ 1,474,491
========== ===========
Ratio of equity to assets............ 4.86% 4.84%
Ratio of tangible equity to tangible
assets............................. 4.30% 4.28%
Total shares of common stock
outstanding........................ 31,562,896 31,562,896
Book value per common share.......... 22.91 22.82
Tangible book value per share........ 20.15 20.06
</TABLE>
- ------------
(1) Excludes FHLB advances with maturities greater than one year of $2,330,345
at March 31, 1999 and as adjusted.
(2) Minority interest consists of $185.5 million stated value of the preferred
stock of the bank subsidiary.
(3) We had 10,000,000 shares of preferred stock authorized, none of which were
issued as of March 31, 1999.
S-21
<PAGE>
ACCOUNTING TREATMENT
The purchase contracts are forward transactions in Bank United common
stock. Upon settlement of a purchase contract, Bank United will receive the
stated amount of $50 on the purchase contract and will issue the required number
of shares of common stock. The stated amount received will be credited to
shareholders' equity and allocated between the common stock and paid-in capital
accounts. The present value of the contract adjustment payments will initially
be charged to equity, with an offsetting credit to liabilities.
Before the issuance of common stock upon settlement of the purchase
contracts, Bank United expects that the PIES will be reflected in Bank United's
earnings per share calculations using the treasury stock method. Under this
method, the number of shares of common stock used in calculating earnings per
share is deemed to be increased by the excess, if any, of the number of shares
issuable upon settlement of the purchase contracts over the number of shares
that could be purchased by Bank United in the market at the average market price
during the period using the proceeds receivable upon settlement. As a result,
Bank United expects there will be no dilutive effect on its earnings per share
except during periods when the average market price of the common stock is above
the Threshold Appreciation Price.
S-22
<PAGE>
DESCRIPTION OF THE PIES
THE FOLLOWING SUMMARY DESCRIPTION OF THE PIES SUPPLEMENTS THE DESCRIPTION
OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS IN THE ACCOMPANYING
PROSPECTUS AND, TO THE EXTENT THIS DESCRIPTION IS INCONSISTENT WITH THE
PROSPECTUS, REPLACES THE DESCRIPTION IN THE PROSPECTUS. THE TERMS OF THE PIES
WILL INCLUDE THOSE STATED IN THE PURCHASE CONTRACT AGREEMENT BETWEEN BANK UNITED
AND THE PURCHASE CONTRACT AGENT. THE FOLLOWING DESCRIPTION OF THE PIES AND THE
SUMMARY DESCRIPTION OF THE PURCHASE CONTRACT AGREEMENT, THE PURCHASE CONTRACTS
AND THE PLEDGE AGREEMENT UNDER THE CAPTIONS "DESCRIPTION OF THE PURCHASE
CONTRACTS" AND "CERTAIN PROVISIONS OF THE PURCHASE CONTRACTS, THE PURCHASE
CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT" IN THIS PROSPECTUS SUPPLEMENT
CONTAIN A DESCRIPTION OF ALL MATERIAL TERMS OF THE PIES, BUT DO NOT PURPORT TO
BE COMPLETE. FOR ADDITIONAL INFORMATION, YOU SHOULD REFER TO THE FORMS OF THE
PURCHASE CONTRACT AGREEMENT, INCLUDING THE FORMS OF THE PIES, AND THE PLEDGE
AGREEMENT, INCLUDING DEFINITIONS OF CERTAIN TERMS USED IN THOSE DOCUMENTS, THAT
HAVE BEEN FILED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
CORPORATE PIES
Each offered Corporate PIES is a unit initially consisting of:
o a purchase contract under which (1) the holder will purchase from Bank
United on the purchase contract settlement date on ,
2002, or upon early settlement, for $50, a number of newly issued
shares of common stock equal to the Settlement Rate described below
under "Description of the Purchase Contracts -- General" and (2)
Bank United will pay contract adjustment payments to the holder; and
o a share of preferred stock with a liquidation preference of $50.
The share of preferred stock will be pledged under the pledge agreement to
secure the holder's obligation to purchase common stock under the purchase
contract.
The stated amount of each Corporate PIES will be allocated between the
purchase contract and the preferred stock comprising that Corporate PIES in
proportion to their respective fair market values at the time of purchase. Bank
United expects that, at the time of issuance, the fair market value of each
purchase contract will be $0 and the fair market value of each share of
preferred stock will be $50. This position generally will be binding on each
beneficial owner of a Corporate PIES, but not on the Internal Revenue Service.
See "United States Federal Income Tax Consequences -- Corporate
PIES -- Allocation of purchase price" on page S-45.
So long as the PIES are in the form of Corporate PIES, the related shares
of preferred stock will be pledged to the collateral agent to secure the
holders' obligations to purchase common stock under the related purchase
contracts.
CREATING TREASURY PIES BY SUBSTITUTING TREASURY SECURITIES
Each holder of Corporate PIES may create Treasury PIES by substituting for
the shares of preferred stock that are a part of the Corporate PIES Treasury
Securities having an aggregate principal amount at maturity equal to the
aggregate purchase price of those shares of preferred stock.
Each Treasury PIES will be a unit consisting of:
o a purchase contract under which (1) the holder will purchase from Bank
United on the purchase contract settlement date, or upon early
settlement, for $50, a number of newly issued shares of common stock
equal to the Settlement Rate and (2) Bank United will pay contract
adjustment payments to the holder; and
o a 1/20 undivided beneficial ownership interest in a related Treasury
Security having a principal amount at maturity equal to $1,000 and
maturing on or prior to the business day preceding the purchase
contract settlement date.
S-23
<PAGE>
The term "business day" means any day other than Saturday or Sunday or a
day on which banking institutions in New York City are authorized or required by
law or executive order to remain closed.
The Treasury Security will be pledged under the pledge agreement to secure
the holder's obligation to purchase common stock under the purchase contract.
Holders of Corporate PIES may create Treasury PIES at any time on or before
the seventh business day preceding the purchase contract settlement date.
Because Treasury Securities are issued in integral multiples of $1,000 and the
Bank United preferred stock has a liquidation preference of $50 per share,
holders of Corporate PIES may create Treasury PIES only in integral multiples of
20.
To create 20 Treasury PIES, a Corporate PIES holder is required to:
o deposit with the securities intermediary a Treasury Security having a
total principal amount at maturity of $1,000; and
o transfer to the purchase contract agent 20 Corporate PIES, accompanied
by a notice stating that the Corporate PIES holder has deposited a
Treasury Security with the securities intermediary and requesting that
the purchase contract agent instruct the collateral agent to release
the related shares of preferred stock with aggregate liquidation
preference of $1,000.
Upon receiving instructions from the purchase contract agent and
confirmation of receipt of the Treasury Security by the securities intermediary,
the collateral agent will cause the securities intermediary to release the
related 20 shares of preferred stock from the pledge and deliver them to the
purchase contract agent, on behalf of the holder, free and clear of Bank
United's security interest. The purchase contract agent then will:
o cancel the 20 Corporate PIES;
o transfer the related shares of preferred stock with an aggregate
liquidation preference of $1,000 to the holder; and
o deliver 20 Treasury PIES to the holder.
The Treasury Security will be substituted for the preferred stock and will
be pledged to the collateral agent to secure the holder's obligation to purchase
common stock under the related purchase contracts. The preferred stock
thereafter will trade separately from the Treasury PIES.
Holders who create Treasury PIES or recreate Corporate PIES, as discussed
below, will be responsible for any fees or expenses payable to the collateral
agent in connection with substitutions of collateral. See "Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement -- Miscellaneous" on page S-36.
RECREATING CORPORATE PIES
Each holder of Treasury PIES may recreate Corporate PIES by:
o depositing with the securities intermediary shares of preferred stock
with an aggregate liquidation preference of $1,000; and
o transferring to the purchase contract agent 20 Treasury PIES,
accompanied by a notice stating that that holder has deposited shares
of preferred stock with an aggregate liquidation preference of $1,000
with the securities intermediary and requesting that the purchase
contract agent instruct the collateral agent to release the related
Treasury Security.
Upon receiving instructions from the purchase contract agent and
confirmation of receipt of the shares of preferred stock by the securities
intermediary, the collateral agent will cause the securities intermediary to
release the related Treasury Security from the pledge and deliver it to the
purchase
S-24
<PAGE>
contract agent, on behalf of the holder, free and clear of the security interest
of Bank United in that Treasury Security. The purchase contract agent then will:
o cancel the 20 Treasury PIES;
o transfer the related Treasury Security to the holder; and
o deliver 20 Corporate PIES to the holder.
Holders of Treasury PIES may recreate Corporate PIES at any time on or
before the seventh business day preceding the purchase contract settlement date.
CURRENT PAYMENTS
Holders of Corporate PIES will be entitled to receive aggregate cash
distributions at a rate of % of the $50 stated amount per annum from and
after , 1999, payable quarterly in arrears, subject to
increase as described under "Description of the Purchase Contracts -- Contract
adjustment payments" starting on page S-29. The quarterly payments on the
Corporate PIES will consist of (1) cumulative cash dividend payments payable on
the related shares of preferred stock at the rate of % of the liquidation
preference per annum and (2) contract adjustment payments payable by Bank United
at the rate of % of the stated amount per annum until ,
2002.
If a holder of Corporate PIES creates Treasury PIES by substituting
Treasury Securities for the preferred stock, the only payments that that holder
will receive on the Treasury PIES will be the quarterly contract adjustment
payments. Instead of payments with respect to preferred stock, original issue
discount will accrue on the related Treasury Securities.
LISTING OF THE CORPORATE PIES, THE TREASURY PIES AND THE PREFERRED STOCK
We have applied to have the Corporate PIES listed on the NYSE. If the
Treasury PIES and the preferred stock are separately traded to a sufficient
extent that applicable listing requirements are met, Bank United intends to try
to cause them to be listed or traded on the same national securities exchange or
automated quotation system as the Corporate PIES are listed or traded.
MISCELLANEOUS
Bank United or its affiliates may purchase from time to time any of the
offered PIES that are then outstanding by tender, in the open market or by
private agreement.
S-25
<PAGE>
DESCRIPTION OF THE PURCHASE CONTRACTS
THE FOLLOWING SUMMARY DESCRIPTION OF THE PURCHASE CONTRACTS SUPPLEMENTS THE
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS IN THE
ACCOMPANYING PROSPECTUS AND, TO THE EXTENT THIS DESCRIPTION IS INCONSISTENT WITH
THE PROSPECTUS, REPLACES THE DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING
DESCRIPTION OF THE PURCHASE CONTRACTS AND THE SUMMARY DESCRIPTION OF CERTAIN
TERMS OF THE PURCHASE CONTRACTS UNDER THE CAPTION "CERTAIN PROVISIONS OF THE
PURCHASE CONTRACTS, THE PURCHASE CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT"
IN THIS PROSPECTUS SUPPLEMENT CONTAIN A DESCRIPTION OF ALL MATERIAL TERMS OF THE
PURCHASE CONTRACTS, BUT DO NOT PURPORT TO BE COMPLETE. FOR ADDITIONAL
INFORMATION, YOU SHOULD REFER TO THE FORMS OF THE PURCHASE CONTRACT AGREEMENT,
INCLUDING THE FORMS OF THE PIES, AND THE PLEDGE AGREEMENT, INCLUDING DEFINITIONS
OF CERTAIN TERMS USED IN THOSE DOCUMENTS, THAT WILL BE FILED AS EXHIBITS TO THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS ARE A PART.
GENERAL
In the discussion that follows:
o "Applicable Market Value" means the average of the Closing Prices of
the common stock on each of the 20 consecutive Trading Days ending on
the third Trading Day preceding the purchase contract settlement date.
o "Closing Price" of the common stock, on any date of determination,
means:
(1) the closing sale price or, if no closing sale price is reported,
the last reported sale price of the common stock on the Nasdaq
National Market on that date or, if the common stock is not listed
for trading on the Nasdaq National Market on that date, as reported
in the composite transactions for the principal United States
securities exchange on which the common stock is so listed; or
(2) if the common stock is not so reported, the last quoted bid price
for the common stock in the over-the-counter market as reported by
the National Quotation Bureau or a similar organization, or, if
that bid price is not available, the average of the mid-point of
the last bid and ask prices of the common stock on that date from
at least three nationally recognized independent investment banking
firms retained for this purpose by Bank United.
o "Trading Day" means a day on which the common stock:
(1) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at
the close of business; and
(2) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the common stock.
Each purchase contract that is a part of a PIES will obligate its holder to
purchase, and Bank United to sell, on the purchase contract settlement date, a
number of newly issued shares of common stock equal to the rate described below,
which we call the "Settlement Rate," for $50 in cash unless the purchase
contract terminates before that date or is settled early at the holder's option.
The number of shares of common stock that may be issued upon settlement of each
purchase contract on the purchase contract settlement date will be determined as
follows, subject to adjustment as described under " -- Anti-dilution
adjustments" below:
o If the Applicable Market Value is equal to or greater than the
Threshold Appreciation Price of $ , then each purchase contract
will be settled for shares of common stock. The Threshold Appreciation
Price represents an appreciation of % above the Reference Price
of $ .
o If the Applicable Market Value is less than the Threshold Appreciation
Price but greater than the Reference Price, then each purchase
contract will be settled for a number of shares of
S-26
<PAGE>
common stock determined by dividing the stated amount of $50 by the
Applicable Market Value. Bank United would retain all appreciation in
the market value of the common stock for the relevant period.
o If the Applicable Market Value is less than or equal to the Reference
Price, then each purchase contract will be settled for shares
of common stock. As a result, the holder would realize the entire loss
on the decline in market value of the common stock for the relevant
period.
For illustrative purposes only, the following table shows the number of
shares of common stock that would be issued upon settlement of each purchase
contract at various assumed Applicable Market Values. The table assumes that
there will be no adjustments to the Settlement Rate described under
"-- Anti-dilution adjustments" below. There can be no assurance that the
actual Applicable Market Value will be within the range shown below.
Given the Reference Price of $ and the Threshold Appreciation Price
of $ , a holder of PIES would receive on the purchase contract settlement
date the following number of shares of common stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES
APPLICABLE MARKET VALUE OF COMMON STOCK
- ------------------------ ----------------
<S> <C>
</TABLE>
No fractional shares of common stock will be issued by Bank United upon
settlement of a purchase contract. In lieu of a fractional share, the holder
will receive an amount of cash equal to the applicable fraction multiplied by
the Applicable Market Value. If, however, a holder surrenders for settlement at
one time more than one purchase contract, then the number of shares of common
stock that may be issued pursuant to those purchase contracts will be computed
based upon the aggregate number of purchase contracts surrendered.
Before the settlement of a purchase contract, the common stock underlying
the purchase contract will not be outstanding for any purpose, and the holder of
the purchase contract will not have any voting rights, rights to dividends or
other distributions or other rights or privileges of a shareholder of Bank
United by virtue of holding that purchase contract.
By accepting a Corporate PIES or a Treasury PIES, a holder will be deemed
to have:
o irrevocably authorized the purchase contract agent as attorney-in-fact
to enter into and perform the related purchase contract on behalf of
that holder;
o agreed to be bound by, and to have consented to, the terms and
provisions of the related purchase contract;
o irrevocably authorized the purchase contract agent as attorney-in-fact
to enter into and perform the pledge agreement on behalf of that
holder; and
o agreed to be bound by the pledge arrangement contained in the pledge
agreement.
In addition, each of those holders will be deemed to have agreed to treat
itself as the owner of the related preferred stock, in the case of Corporate
PIES, or the Treasury Securities, in the case of Treasury PIES, in each case for
U.S. federal, state and local income and franchise tax purposes.
S-27
<PAGE>
SETTLEMENT THROUGH REMARKETING
Holders of Corporate PIES who fail to notify the purchase contract agent,
on or before the seventh business day preceding the purchase contract settlement
date, of their intention to effect settlement of the related purchase contracts
with separate cash in the manner described under "-- Notice to settle with
cash," or who so notify the purchase contract agent but fail to deliver
separate cash on or before the fifth business day preceding the purchase
contract settlement date, will have their shares of preferred stock remarketed
on the third business day preceding the purchase contract settlement date. Under
the remarketing agreement between Bank United and Lehman Brothers, Lehman
Brothers will use its commercially reasonable efforts to remarket those shares
of preferred stock, together with any shares of preferred stock not then a part
of the Corporate PIES as to which the holders have requested remarketing, on
that date at a price of 100.50% of the aggregate liquidation preference of those
shares. The proceeds from the remarketing of the shares of preferred stock that
are a part of the Corporate PIES will automatically be applied to satisfy in
full those Corporate PIES holders' obligations to purchase common stock under
the related purchase contracts and to pay the remarketing fee to Lehman Brothers
for that remarketing. See "Description of the Preferred Stock -- Market Rate
Reset by Remarketing" starting on page S-38.
If Lehman Brothers cannot remarket the preferred stock, a "Failed
Remarketing" will occur, and Bank United will be entitled to exercise its
rights as a secured party and, subject to applicable law, retain the preferred
stock pledged as collateral under the pledge agreement or sell it in one or more
private sales. In either case, the obligations of the holders under the related
purchase contracts would be satisfied in full. If Bank United exercises its
rights as a secured creditor, any accrued and unpaid interest payments on shares
of preferred stock will be paid in cash by Bank United to the purchase contract
agent for payment to the holders of the Corporate PIES of which those shares are
a part. Bank United will cause a notice of the Failed Remarketing to be
published on the second business day preceding the purchase contract settlement
date in a daily newspaper in the English language of general circulation in New
York City, which is expected to be THE WALL STREET JOURNAL.
As long as the PIES or the preferred stock are evidenced by one or more
global security certificates deposited with The Depository Trust Company, Bank
United will request, not later than 15 nor more than 30 calendar days prior to
the remarketing date, that DTC notify its participants holding preferred stock
or Corporate PIES of the remarketing and of the procedures to be followed for
settlement with separate cash. See "Description of the PIES -- Book-entry
system" below. Bank United will try to have in effect a registration statement
covering the shares of preferred stock to be remarketed in a form that Lehman
Brothers may use in connection with the remarketing process.
NOTICE TO SETTLE WITH CASH
A holder of a Corporate PIES or a Treasury PIES wishing to settle the
related purchase contract with separate cash must notify the purchase contract
agent by delivering a "Notice to settle by separate cash" on or before 5:00
p.m., New York City time:
o on the seventh business day preceding the purchase contract settlement
date, in the case of a Corporate PIES; and
o on the second business day preceding the purchase contract settlement
date, in the case of a Treasury PIES.
A holder wishing to settle with separate cash must deliver to the
securities intermediary cash payment in the form of a certified or cashier's
check or by wire transfer, in each case in immediately available funds payable
to or upon the order of the securities intermediary. Payment must be delivered
before 11:00 a.m., New York City time, on the fifth business day before the
purchase contract settlement date in the case of a Corporate PIES, or on the
business day before the purchase contract settlement date in the case of
Treasury PIES. Upon receipt of the cash payment, the related shares of preferred
stock, in the case of Corporate PIES, or Treasury Securities, in the case of
Treasury PIES, will be released from the pledge arrangement and transferred to
the purchase contract agent for
S-28
<PAGE>
distribution to the holder of the related Corporate PIES. If the payment is not
delivered by that time and date, then the related shares of preferred stock will
be remarketed or Bank United will receive at maturity the principal amount of
the related Treasury Securities in full satisfaction of that holder's
obligations under the related purchase contract.
Any cash received by the securities intermediary upon separate cash
settlement will be invested promptly in permitted investments and paid to Bank
United on the purchase contract settlement date. Any funds received by the
securities intermediary in respect of the investment earnings from those
investments will be distributed to the purchase contract agent for payment to
the holders who settled with cash.
EARLY SETTLEMENT
A holder of Corporate PIES or Treasury PIES may settle the related purchase
contracts prior to the purchase contract settlement date by delivering to the
purchase contract agent:
o a completed "Election to settle early" form; and
o payment, payable to Bank United in immediately available funds, in an
amount equal to $50 multiplied by the number of purchase contracts
being settled.
A holder of Corporate PIES may settle early the related purchase contracts
at any time on or before the seventh business day preceding the purchase
contract settlement date. A holder of Treasury PIES also may settle early at any
time before the second business day preceding the purchase contract settlement
date, but only in integral multiples of 20 Treasury PIES.
Upon early settlement, Bank United will issue, and the holder will be
entitled to receive, newly issued shares of common stock for each
Corporate PIES or Treasury PIES, regardless of the market price of the common
stock on the date of early settlement but subject to adjustment under the
circumstances described under " -- Anti-dilution adjustments" below. The
holder's right to receive future contract adjustment payments will terminate.
Bank United will cause (1) the common stock to be issued and (2) the related
shares of preferred stock, in the case of Corporate PIES, or Treasury
Securities, in the case of Treasury PIES, securing those purchase contracts to
be released from the pledge under the pledge agreement, and, within three
business days following the settlement date, each will be transferred to the
purchase contract agent for delivery to the holder or the holder's designee.
If the purchase contract agent receives a completed "Election to settle
early" and payment of $50 for each PIES being settled early by 5:00 p.m., New
York City time, on any business day, then that day will be considered the
settlement date. If the purchase contract agent receives the foregoing after
5:00 p.m., New York City time, on any business day or at any time on a day that
is not a business day, then the next business day will be considered the
settlement date. As long as the PIES are evidenced by one or more global
security certificates deposited with DTC, procedures for early settlement also
will be governed by standing arrangements between DTC and the purchase contract
agent.
CONTRACT ADJUSTMENT PAYMENTS
Contract adjustment payments will be fixed at a rate per annum of % of
the $50 stated amount per purchase contract, subject to increase as described
below. Contract adjustment payments payable for any period will be computed (1)
for any full quarterly period on the basis of a 360-day year of twelve 30-day
months and (2) for any period shorter than a full quarterly period, on the basis
of a 30-day month and, for periods of less than a month, on the basis of the
actual number of days elapsed per 30-day month. Contract adjustment payments
will accrue from , 1999 and will be payable quarterly in arrears on
, , , and , of each year, beginning on , 1999.
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If a Reset Transaction, as defined below, occurs, the rate at which the
contract adjustment payments accrue will be adjusted to equal the Adjusted
Contract Adjustment Payment Rate from the effective date of the Reset
Transaction to, but not including, the earlier of:
o the effective date of any later Reset Transaction, or
o the purchase contract settlement date.
"Reset Transaction" means a merger, consolidation or statutory share
exchange to which the entity that is the issuer of the common stock for which
the purchase contracts are then to be settled is a party, a sale of all or
substantially all the assets of that entity, a recapitalization of that common
stock or a distribution described in clause (4) of the first paragraph under
" -- Anti-dilution adjustments" below, after the effective date of which
transaction or distribution the purchase contracts are then to be settled for:
o shares of an entity the common stock of which had a Dividend Yield for
the four fiscal quarters of that entity preceding the public
announcement of that transaction or distribution that was more than
250 basis points (.250) higher than the Dividend Yield on the common
stock, or other common stock then issuable upon settlement of the
purchase contracts, for the four fiscal quarters preceding the public
announcement of such transaction or distribution, or
o shares of an entity that announces a dividend policy prior to the
effective date of the transaction or distribution which policy, if
implemented, would result in a Dividend Yield on that entity's common
stock for the next four fiscal quarters that would result in such a
250 basis point increase.
The "Adjusted Contract Adjustment Payment Rate," with respect to any
Reset Transaction, will be the rate per annum that is the arithmetic average of
the rates quoted by two Reference Dealers selected by Bank United or its
successor as the rate at which contract adjustment payments should accrue so
that the fair market value, expressed in dollars, of a Corporate PIES
immediately after the later of:
o the public announcement of the Reset Transaction, or
o the public announcement of a change in dividend policy in connection
with the Reset Transaction,
will equal the average Trading Price of a Corporate PIES for the 20 Trading Days
preceding the date of public announcement of the Reset Transaction. However, the
Adjusted Contract Adjustment Payment Rate will not be less than % per
annum.
The "Dividend Yield" on any security for any period means the dividends
paid or proposed to be paid pursuant to an announced dividend policy on that
security for that period divided by, if with respect to dividends paid on that
security, the average Closing Price of that security during that period and, if
with respect to dividends proposed to be paid on that security, the Closing
Price of that security on the effective date of the related Reset Transaction.
"Reference Dealer" means a dealer engaged in the trading of convertible
securities.
"Trading Price" of a security on any date of determination means:
o the closing sale price or, if no closing sale price is reported, the
last reported sale price of a security, regular way, on the NYSE on
that date;
o if that security is not listed for trading on the NYSE on any such
date, the closing sale price as reported in the composite transactions
for the principal United States securities exchange on which that
security is so listed;
o if that security is not so listed on a United States national or
regional securities exchange, the closing sale price as reported by
the Nasdaq National Market;
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o if that security is not so reported, the price quoted by Interactive
Data Corporation for that security or, if Interactive Data Corporation
is not quoting such price, a similar quotation service selected by
Bank United;
o if that security is not so quoted, the average of the mid-point of the
last bid and ask prices for that security from at least two dealers
recognized as market-makers for such security; or
o if that security is not so quoted, the average of the last bid and ask
prices for that security from a Reference Dealer.
Contract adjustment payments will be payable to the holders of purchase
contracts as they are registered on the books and records of the purchase
contract agent on the relevant record dates. So long as the PIES remain in
book-entry only form that date will be the business day preceding the relevant
payment dates. Contract adjustment payments will be paid through the purchase
contract agent, which will hold amounts received in respect of the contract
adjustment payments for the benefit of the holders of the purchase contracts
that are a part of those PIES. Subject to any applicable laws and regulations,
each payment will be made as described under " -- Book-entry issuance" below.
If the PIES do not remain in book-entry only form, the relevant record dates
will be the 15th business day before the relevant payment dates. If any date on
which contract adjustment payments are to be made is not a business day, then
payment of the contract adjustment payments payable on that date will be made on
the next day that is a business day and without any interest in respect of any
such delay. However, if such business day is in the next calendar year, payment
will be made on the prior business day.
ANTI-DILUTION ADJUSTMENTS
In this section, "Current Market Price" per share of common stock on any
day means the average of the daily Closing Prices for the five consecutive
Trading Days selected by Bank United beginning not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution
requiring that computation. In this paragraph, the term "ex date," when used
with respect to any issuance or distribution, will mean the first date on which
the common stock trades regular way on the applicable exchange or in the
applicable market without the right to receive that issuance or distribution.
The formula for determining the Settlement Rate will be subject to
adjustment upon the occurrence of specified events, including:
(1) the payment of dividends and other distributions on the common
stock made in common stock;
(2) the issuance to all holders of common stock of rights, options or
warrants entitling them, for a period of up to 45 days, to
subscribe for or purchase common stock at less than their Current
Market Price;
(3) subdivisions, splits or combinations of common stock;
(4) distributions to all holders of common stock of evidences of
indebtedness or assets, including securities but excluding any
dividend or distribution covered by clause (1) or (2) above and
any dividend or distribution paid exclusively in cash;
(5) distributions consisting exclusively of cash to all holders of
common stock in an aggregate amount that, together with (a) other
all-cash distributions made within the preceding 12 months and
(b) any cash plus the fair market value, as of the expiration of
the tender or exchange offer referred to below, of consideration
payable in respect of any tender or exchange offer by Bank United
or any of its subsidiaries for the common stock concluded within
the preceding 12 months, exceeds 15% of the total market
capitalization of Bank United on the date of the distribution;
total market capitalization is the product of the Current Market
Price of the common stock multiplied by the number of shares of
common stock then outstanding; and
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(6) the successful completion of a tender or exchange offer made by
Bank United or any of its subsidiaries for the common stock that
involves an aggregate consideration having a fair market value
that, together with (a) any cash and the fair market value of
other consideration payable in respect of any tender or exchange
offer by Bank United or any of its subsidiaries for the common
stock concluded within the preceding 12 months and (b) the total
amount of any all-cash distributions to all holders of Bank
United common stock made within the preceding 12 months, exceeds
15% of the total market capitalization of Bank United on the
expiration of that tender or exchange offer.
In the case of certain reclassifications, consolidations, mergers, sales or
transfers of assets or other transactions pursuant to which the common stock is
converted into the right to receive other securities, cash or property, each
purchase contract then outstanding would become, without the consent of the
holder of the related Corporate PIES or Treasury PIES, a contract to purchase
only the kind and amount of securities, cash and other property receivable upon
consummation of the transaction by a holder of the number of shares of common
stock that would have been received by the holder of the related Corporate PIES
or Treasury PIES immediately before the date of consummation of the transaction
if the holder had then settled that purchase contract.
If at any time Bank United makes a distribution of property to its
shareholders that would be taxable to shareholders as a dividend for United
States federal income tax purposes, for example, distributions of evidences of
indebtedness or assets of Bank United, but generally not stock dividends or
rights to subscribe to capital stock, and, pursuant to the Settlement Rate
adjustment provisions of the purchase contract agreement, the Settlement Rate is
increased, that increase may give rise to a taxable dividend to holders of the
PIES. See "United States Federal Income Tax Consequences -- Corporate
PIES -- Purchase Contracts -- Adjustment to settlement rate" on page S-48.
In addition, Bank United may make similar increases in the Settlement Rate
as it deems advisable in order to avoid or diminish any income tax to holders of
its capital stock resulting from any dividend or distribution of capital stock,
or rights to acquire capital stock, or from any event treated in that way for
income tax purposes or for any other reason.
Adjustments to the Settlement Rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the Settlement Rate will be required
unless the adjustment would require an increase or decrease of at least 1% in
the Settlement Rate. However, any adjustments not required to be made by reason
of the above will be carried forward and taken into account in any subsequent
adjustment.
Whenever the Settlement Rate is adjusted, Bank United must deliver to the
purchase contract agent a certificate setting forth the Settlement Rate,
detailing the calculation of the Settlement Rate and describing the facts upon
which the adjustment is based. In addition, Bank United must notify the holders
of the PIES of the adjustment within 10 business days of any event requiring
that adjustment and describe in reasonable detail the method by which the
Settlement Rate was adjusted.
Each adjustment to the Settlement Rate will result in a corresponding
adjustment to the number of shares of common stock issuable upon early
settlement of a purchase contract.
If an adjustment is made to the Settlement Rate, an adjustment also will be
made to the Applicable Market Value solely to determine which Settlement Rate
will be applicable on the purchase contract settlement date.
TERMINATION
The purchase contracts and the obligations and rights of Bank United and of
the holders of the PIES under the purchase contracts, including the holders'
right to receive accrued contract adjustment payments and the obligation and
right to purchase and receive common stock, will terminate automatically upon
the occurrence of certain events of bankruptcy, insolvency or reorganization
with respect to Bank United. Upon termination, the collateral agent will release
the related preferred stock, in the case of Corporate PIES, or Treasury
Securities, in the case of Treasury PIES, from the pledge
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<PAGE>
arrangement and cause the securities intermediary to transfer the preferred
stock or Treasury Securities to the purchase contract agent for distribution to
the PIES holders. Upon termination, however, that release and distribution may
be subject to a delay. In the event that Bank United becomes the subject of a
case under the Bankruptcy Code, the delay may occur as a result of the automatic
stay under the Bankruptcy Code and continue until such automatic stay has been
lifted. Bank United expects any delay to be limited.
PLEDGED SECURITIES AND PLEDGE AGREEMENT
The shares of preferred stock that are a part of the Corporate PIES or, if
substituted, the Treasury Securities that are a part of the Treasury PIES, which
we collectively call the "Pledged Securities," will be pledged to the
collateral agent for the benefit of Bank United under the pledge agreement to
secure the obligations of the holders of the PIES to purchase common stock under
the related purchase contracts. The rights of the holders of the PIES with
respect to the Pledged Securities will be subject to the security interest of
Bank United in the Pledged Securities. No holder of Corporate PIES or Treasury
PIES will be permitted to withdraw the Pledged Securities related to Corporate
PIES or Treasury PIES from the pledge arrangement except:
(1) to substitute Treasury Securities for preferred stock;
(2) to substitute preferred stock for Treasury Securities; and
(3) upon early settlement, settlement for separate cash or
termination of the related purchase contracts.
In connection with clauses (1) and (2) above, see "Description of the
PIES -- Creating Treasury PIES by substituting Treasury Securities" and
" -- Recreating Corporate PIES" on pages S-23 and S-24.
Subject to the security interest and the terms of the purchase contract
agreement and the pledge agreement, each holder of Corporate PIES will be
entitled, through the purchase contract agent and the collateral agent, to all
of the proportional rights and preferences of the related preferred stock,
including dividend payments, voting and repayment rights, and each holder of
Treasury PIES will retain beneficial ownership of the related Treasury
Securities pledged in respect of the related purchase contracts. Bank United
will have no interest in the Pledged Securities other than its security
interest.
The securities intermediary will distribute, upon receipt of interest on
the Pledged Securities, payments to the purchase contract agent, which in turn
will distribute those payments, together with contract adjustment payments
received from Bank United, to the holders in whose names the PIES are registered
at the close of business on the record date prior to the date of such
distribution.
BOOK-ENTRY ISSUANCE
The depositary for the PIES will be DTC. The PIES will be issued only as
fully-registered securities registered in the name of Cede & Co., DTC's nominee.
The PIES will be issued in accordance with the procedures described under
"Book-Entry Procedures and Settlement" below.
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<PAGE>
CERTAIN PROVISIONS OF THE PURCHASE CONTRACTS,
THE PURCHASE CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT
GENERAL
Distributions on the PIES will be payable, the purchase contracts and
documents related to the PIES will be settled and transfers of the PIES will be
able to be registered at the office of the purchase contract agent in the
Borough of Manhattan, New York City. In addition, if the PIES do not remain in
book-entry form, Bank United has the option to pay distributions on the PIES by
check mailed to the address of the person entitled to those distributions as
shown on the security register of Bank United.
No service charge will be made for any registration of transfer or exchange
of the PIES, except for any tax or other governmental charge that may be imposed
in connection with a transfer or exchange.
MODIFICATION
Subject to limited exceptions, Bank United and the purchase contract agent
may not modify the terms of the purchase contracts or the purchase contract
agreement without the consent of the holders of not less than a majority of the
outstanding purchase contracts, except that no modification may, without the
consent of the holder of each outstanding purchase contract affected thereby:
o change any payment date;
o change the amount or type of collateral required to be pledged to
secure a holder's obligations under the purchase contract, except for
the right of a holder of Corporate PIES to substitute Treasury
Securities for the pledged preferred stock or the right of a holder of
Treasury PIES to substitute preferred stock for the pledged Treasury
Securities, impair the right of the holder of any purchase contract to
receive interest on the collateral or otherwise adversely affect the
holder's rights in or to the collateral;
o reduce any contract adjustment payments or change the place or
currency of payment;
o impair the right to institute suit for the enforcement of a purchase
contract;
o reduce the number of shares of common stock purchasable under a
purchase contract, increase the purchase price of the common stock on
settlement of any purchase contract, change the purchase contract
settlement date or otherwise adversely affect the holder's rights
under a purchase contract; or
o reduce the above-stated percentage of outstanding purchase contracts
whose holders' consent is required for the modification or amendment
of the provisions of the purchase contracts or the purchase contract
agreement.
However, if any amendment or proposal would adversely affect only the
Corporate PIES or only the Treasury PIES, then only the affected class of
holders will be entitled to vote on the amendment or proposal, and the amendment
or proposal will not be effective except with the consent of the holders of not
less than a majority of the class or, if referred to in the listed items above,
all of the holders of the class.
Subject to limited exceptions, Bank United, the collateral agent, the
securities intermediary and the purchase contract agent may not modify the terms
of the pledge agreement without the consent of the holders of not less than a
majority of the outstanding purchase contracts, except that no modification may,
without the unanimous consent of the holders of each outstanding PIES adversely
affected thereby:
o change the amount or type of collateral underlying a PIES, except for
the right of a holder of Corporate PIES to substitute Treasury
Securities for the pledged preferred stock or the right of a holder of
Treasury PIES to substitute preferred stock for the pledged Treasury
Securities,
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<PAGE>
impair the right of the holder of any PIES to receive distributions on
the underlying collateral or otherwise adversely affect the holder's
rights in or to the collateral;
o otherwise effect any action that, under the purchase contract
agreement, would require the consent of the holders of each
outstanding PIES; or
o reduce the above-stated percentage of outstanding purchase contracts
whose holders' consent is required for the amendment.
However, if any amendment or proposal would adversely affect only the
Corporate PIES or only the Treasury PIES, then only the affected class of
holders will be entitled to vote on the amendment or proposal, and the amendment
or proposal will not be effective except with the consent of the holders of not
less than a majority of the class or, if referred to in the items listed above,
all of the holders of the class.
NO CONSENT TO ASSUMPTION
Each holder of Corporate PIES or Treasury PIES will be deemed under the
terms of the purchase contract agreement, by his or her acceptance of such PIES,
to have expressly withheld any consent to the assumption, also known as
affirmance, of the related purchase contracts by Bank United, its receiver,
liquidator or trustee in the event that Bank United becomes the subject of a
case under the Bankruptcy Code or other similar state or federal law providing
for reorganization or liquidation.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Bank United will agree in the purchase contract agreement that it will not
merge or consolidate with any other entity or sell, assign, transfer, lease or
convey all or substantially all of its properties and assets to any other entity
or group of affiliated entities unless:
o either Bank United is the continuing corporation or the successor
corporation is a corporation organized under the laws of the United
States of America, a state thereof or the District of Columbia and
that corporation expressly assumes all the obligations of Bank United
under the purchase contracts, the purchase contract agreement and the
pledge agreement by one or more supplemental agreements in form
reasonably satisfactory to the purchase contract agent and the
collateral agent; and
o Bank United or that successor corporation is not, immediately after
such merger, consolidation, sale, assignment, transfer, lease or
conveyance, in default in the performance of any or condition
underlying the purchase contract, the PIES or the pledge agreement.
GOVERNING LAW
The purchase contracts, the purchase contract agreement and the pledge
agreement will be governed by and construed in accordance with the laws of the
State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
First National Bank of Chicago will be the purchase contract agent. The
purchase contract agent will act as the agent for the holders of the PIES from
time to time. The purchase contract agent will not be obligated to take any
discretionary action in connection with a default under the terms of the PIES or
the purchase contract agreement.
The purchase contract agreement will contain provisions limiting the
liability of the purchase contract agent. The purchase contract agreement also
will contain provisions under which the purchase contract agent may resign or be
replaced. Resignation or replacement would be effective upon the appointment of
a successor.
INFORMATION CONCERNING THE COLLATERAL AGENT
The Bank of New York will be the collateral agent. The collateral agent
will act solely as the agent of Bank United and will not assume any obligation
or relationship of agency or trust for or with
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<PAGE>
any of the holders of the PIES except for the obligations owed by a pledgee of
property to the owner thereof under the pledge agreement and applicable law.
The pledge agreement will contain provisions limiting the liability of the
collateral agent. The pledge agreement also will contain provisions under which
the collateral agent may resign or be replaced. Resignation or replacement would
be effective upon the appointment of a successor.
INFORMATION CONCERNING THE SECURITIES INTERMEDIARY
The Bank of New York will be the securities intermediary. All property
delivered to the securities intermediary pursuant to the purchase contract
agreement or the pledge agreement will be credited to a collateral account
established by the securities intermediary for the collateral agent. The
securities intermediary will treat the purchase contract agent as entitled to
exercise all rights relating to any financial asset credited to such collateral
account, subject to the provisions of the pledge agreement.
MISCELLANEOUS
The purchase contract agreement will provide that Bank United will pay all
fees and expenses related to (1) the retention of the collateral agent and the
securities intermediary and (2) the enforcement by the purchase contract agent
of the rights of the holders of the PIES. However, holders who elect to
substitute the related Pledged Securities, thus creating Treasury PIES or
recreating Corporate PIES, will be responsible for any fees or expenses payable
in connection with the substitution, as well as for any commissions, fees or
other expenses incurred in acquiring the Pledged Securities to be substituted.
Bank United will not be responsible for any of those fees or expenses.
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<PAGE>
DESCRIPTION OF THE PREFERRED STOCK
GENERAL
ALL REFERENCES TO PREFERRED STOCK IN THIS PROSPECTUS SUPPLEMENT, INCLUDING
THIS SECTION, APPLY TO THE SERIES B PREFERRED STOCK OF BANK UNITED ONLY, UNLESS
WE OTHERWISE EXPRESSLY STATE. THE FOLLOWING SUMMARY DESCRIPTION SUPPLEMENTS THE
DESCRIPTION OF THE PREFERRED STOCK IN THE ACCOMPANYING PROSPECTUS AND, TO THE
EXTENT THIS DESCRIPTION IS INCONSISTENT WITH THE PROSPECTUS, REPLACES THE
DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING DESCRIPTION OF THE PREFERRED STOCK
CONTAINS A DESCRIPTION OF ALL MATERIAL TERMS OF THE SERIES B PREFERRED STOCK,
BUT DOES NOT PURPORT TO BE COMPLETE. FOR ADDITIONAL INFORMATION, YOU SHOULD
REFER TO OUR CERTIFICATE OF INCORPORATION, OUR BY-LAWS AND THE CERTIFICATE OF
DESIGNATIONS FOR THE SERIES B PREFERRED STOCK. OUR CERTIFICATE OF INCORPORATION
AND BY-LAWS ARE FILED AS EXHIBITS TO THE REGISTRATION STATEMENTS OF WHICH THIS
PROSPECTUS SUPPLEMENT IS A PART. WE HAVE FILED A FORM OF THE CERTIFICATE OF
DESIGNATIONS AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
The Bank United board of directors has authorized the issuance of a series
of preferred stock consisting of up to 2,000,000 shares. These shares of
preferred stock will be issued in connection with the PIES offering and
constitute a single series of preferred stock of Bank United, which will be
called the "Series B Preferred Stock." Bank United may, in the future, issue
additional series of preferred stock. When issued and sold for the consideration
described in this prospectus supplement, the preferred stock will be duly and
validly issued, fully paid and nonassessable. The preferred stock will not be
convertible into shares of common stock or any other class or series of capital
stock of Bank United. The holders of the preferred stock will have no preemptive
rights with respect to any shares of Bank United capital stock or any other
securities convertible into or carrying rights or options to purchase any shares
of Bank United capital stock. The preferred stock will not be subject to any
sinking fund or other obligation by Bank United to repurchase or retire the
preferred stock. The registrar, transfer agent and dividend disbursing agent for
the preferred stock is .
RANKING
The preferred stock will rank senior to the common stock with respect to
the payment of dividends and upon liquidation, dissolution or winding up of Bank
United.
DIVIDENDS
Holders of the preferred stock will be entitled to receive, when and as
declared by the Bank United board of directors out of assets of Bank United
legally available for payment, cash dividends at the annual rate of % per
share, equivalent to $ per share, until the purchase contract settlement date
on , 2002, and at the Reset Rate thereafter. Dividends
on the preferred stock will be payable quarterly in arrears on
, , and of each
year, beginning on , 1999, or if that date is not a
business day, the next succeeding business day. Dividends on the preferred stock
will begin to accumulate and be cumulative from the date of original issuance
and will be payable to holders of record as they appear on the stock books of
Bank United on the record dates for the dividend payments. Those record dates
will be not more than 60 days nor less than 10 days preceding the payment dates
and will be fixed by the board of directors of Bank United. However, holders of
shares of preferred stock called for redemption on a redemption date falling
between a dividend payment record date and the dividend payment date will
receive the dividend payment together with all other accumulated and unpaid
dividends on the date fixed for redemption instead of on the dividend payment
date. Dividends payable on the preferred stock for any period longer or shorter
than a full dividend period will be computed on the basis of twelve 30-day
months, a 360-day year and the actual number of days elapsed in the period.
Dividends payable per share of preferred stock for each quarterly dividend
period will be computed by dividing the annual dividend amount of $ by four.
Holders of the preferred stock will not be entitled to any dividends, whether
payable in cash, property
S-37
<PAGE>
or securities, in excess of the full cumulative dividends, as described in this
paragraph. No interest, or sum of money in lieu of interest, will be payable in
respect of any accumulated and unpaid dividends.
If dividends are not paid in full, or declared in full and sums set apart
for their payment, on the preferred stock and on any other capital stock ranking
equally as to dividends with the preferred stock, all dividends declared on
shares of preferred stock and shares of that other capital stock will be
declared and paid pro rata so that in all cases the amount of dividends declared
per share on the preferred stock and that other capital stock will bear to each
other the same ratio that accrued and unpaid dividends per share on the shares
of preferred stock and that other capital stock bear to each other. Except as
provided above, unless full cumulative dividends on all outstanding shares of
the preferred stock have been paid or declared and sums set aside for their
payment,
o dividends, other than dividends paid in common stock or other stock
ranking junior to the preferred stock as to dividends and upon
liquidation, dissolution or winding up, may not be declared or paid or
set apart for payment,
o other distributions may not be made on the common stock or on any
other stock of Bank United ranking junior to the preferred stock as to
dividends, or upon liquidation, dissolution or winding up, and
o any common stock or any other stock of Bank United ranking junior to
or on a parity with the preferred stock as to dividends or upon
liquidation, dissolution or winding up may not be redeemed, purchased
or otherwise acquired for any consideration by Bank United, except by
conversion into or exchange for stock of Bank United ranking junior to
the preferred stock as to dividends and upon liquidation, dissolution
or winding up.
DIVIDEND RATE RESET BY REMARKETING
The dividend rate on the preferred stock will be reset to the Reset Rate on
the third day preceding the purchase contract settlement date. The Reset Rate
will be the rate per annum that results from the remarketing of the shares of
preferred stock that are a part of the Corporate PIES as to which the holders
have not given notice of their election to settle the related purchase contracts
with cash, or have given notice but failed to deliver cash, and the shares of
preferred stock that are not a part of the Corporate PIES as to which the
holders have requested remarketing. On the remarketing date, Lehman Brothers
will use commercially reasonable efforts to remarket those shares of preferred
stock at a price equal to 100.50% of the aggregate liquidation preference of
those shares.
REMARKETING PROCEDURES. Below is a summary of the procedures to be
followed in connection with a remarketing of the preferred stock.
As long as the PIES or the preferred stock are evidenced by one or more
global security certificates deposited with DTC, Bank United will request, not
later than 15 nor more than 30 calendar days prior to the remarketing date, that
DTC notify its participants holding preferred stock or Corporate PIES of the
remarketing.
Not later than 5:00 p.m., New York City time, on the seventh business day
preceding the purchase contract settlement date, which is also four business
days prior to the remarketing date, any holder of shares of preferred stock that
are a part of the Corporate PIES may elect to have those shares remarketed.
Holders of Corporate PIES that do not give notice before that time of their
intention to settle their related purchase contracts for separate cash, and
holders who give notice but fail to deliver cash before 11:00 a.m., New York
City time, on the fifth business day preceding the purchase contract settlement
date, will be deemed to have consented to the disposition of the shares of
preferred stock that are a part of their Corporate PIES in the remarketing.
Holders of shares of preferred stock that are not a part of the Corporate PIES
who wish to have their shares remarketed must give notice of their election
before 11:00 a.m., New York City time, on that fifth business day. Any such
notice will be irrevocable and may not be conditioned upon the level at which
the Reset Rate is established in the remarketing.
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If none of the holders elects to have preferred stock remarketed in the
remarketing, the Reset Rate will be the rate determined by Lehman Brothers, in
its sole discretion, as the rate that would have been established had a
remarketing been held on the remarketing date.
If Lehman Brothers determines that it will be able to remarket all the
shares of preferred stock tendered or deemed tendered for purchase at a price of
100.50% of the aggregate liquidation preference of those shares before 4:00
p.m., New York City time, on the remarketing date, Lehman Brothers will
determine the Reset Rate, which will be the rate, rounded to the nearest
one-thousandth (0.001) of one percent, per annum that Lehman Brothers
determines, in its sole judgment, to be the lowest rate per year that will
enable it to remarket all the shares of preferred stock tendered or deemed
tendered for remarketing at that price.
If, by 4:00 p.m., New York City time, on the remarketing date, Lehman
Brothers is unable to remarket all the shares of preferred stock tendered or
deemed tendered for purchase, a Failed Remarketing will be deemed to have
occurred, and Lehman Brothers will so advise DTC and Bank United. If a Failed
Remarketing occurs, the Reset Rate will be equal to (1) the "AA" Composite
Commercial Paper Rate, as defined in the next paragraph, plus (2) a spread
ranging from 300 to 700 basis points based on the credit ratings of the
preferred stock at that time.
" "AA' Composite Commercial Paper Rate" on any date means:
o the interest equivalent of the 60-day rate on commercial paper placed
on behalf of issuers whose corporate bonds are rated "AA" by S&P or
the equivalent of that rating by S&P or the equivalent of that rating
by S&P or another rating agency, as made available on a discount basis
or otherwise by the Federal Reserve Board for the business day
immediately preceding that date; or
o if the Federal Reserve Board does not make available any such rate,
then the arithmetic average of those rates, as quoted on a discount
basis or otherwise, by the Commercial Paper Dealers, as defined in the
next paragraph, to Lehman Brothers for the close of business on the
business day next preceding that date.
"Commercial Paper Dealers" means Lehman Commercial Paper Inc., Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated or their
affiliates or successors, if they are commercial paper dealers.
If any Commercial Paper Dealer does not quote a rate required to determine
the "AA" Composite Commercial Paper Rate, the "AA" Composite Commercial
Paper Rate will be determined on the basis of the quotation or quotations
furnished by the remaining Commercial Paper Dealer or Commercial Paper Dealers
and any substitute commercial paper dealer or substitute commercial paper
dealers selected by Lehman Brothers or, if Lehman Brothers does not select any
such substitute commercial paper dealer or substitute commercial paper dealers,
by the remaining Commercial Paper Dealer or Commercial Paper Dealers.
By approximately 4:30 p.m., New York City time, on the remarketing date, so
long as there has not been a Failed Remarketing, Lehman Brothers will advise:
o DTC and Bank United of the Reset Rate determined in the remarketing
and the number of shares of preferred stock sold in the remarketing;
o each person purchasing shares of preferred stock in the remarketing or
the appropriate DTC participant of the Reset Rate and the number of
shares of preferred stock that person is to purchase; and
o each of those purchasers to give instructions to its DTC participant
to pay the purchase price on the purchase contract settlement date in
same day funds against delivery of the shares of preferred stock
purchased through the facilities of DTC.
In accordance with DTC's normal procedures, on the purchase contract
settlement date, the transactions described above with respect to each share of
preferred stock tendered for purchase and
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sold in the remarketing will be executed through DTC, and the accounts of the
respective DTC participants will be debited and credited and those shares
delivered by book entry as necessary to effect purchases and sales of the shares
of preferred stock. DTC will make payment in accordance with its normal
procedures.
If any holder selling shares of preferred stock in the remarketing fails to
deliver those shares, the direct or indirect DTC participant of the selling
holder and of any other person that was to have purchased shares of preferred
stock in the remarketing may deliver to that other person a number of shares of
preferred stock that is less than the number of shares of preferred stock that
otherwise was to be purchased by that person. In that event, the number of
shares of preferred stock to be so delivered will be determined by the direct or
indirect participant, and delivery of the lesser number of shares of preferred
stock will constitute good delivery.
The right of each holder to have shares of preferred stock tendered for
purchase will be limited to the extent that:
o Lehman Brothers conducts a remarketing pursuant to the terms of the
remarketing agreement;
o shares of preferred stock tendered have not been called for
redemption;
o Lehman Brothers is able to find a purchaser or purchasers for tendered
shares of preferred stock; and
o the purchaser or purchasers deliver the purchase price for the shares
of preferred stock to Lehman Brothers.
Lehman Brothers is not obligated to purchase any shares of preferred stock
that would otherwise remain unsold in the remarketing. Neither Bank United nor
Lehman Brothers will be obligated in any case to provide funds to make payment
upon tender of preferred stock for remarketing.
Bank United will be liable for any and all costs and expenses incurred in
connection with the remarketing.
REMARKETING AGENT. The remarketing agent will be Lehman Brothers. Bank
United and Lehman Brothers will enter into the remarketing agreement which
provides that Lehman Brothers will act as the exclusive remarketing agent and
will use commercially reasonable efforts to remarket securities tendered or
deemed tendered for purchase in the remarketing at a price of 100.50% of their
liquidation preference. Under certain circumstances, some portion of the shares
of preferred stock tendered in the remarketing may be purchased by the
remarketing agent.
The remarketing agreement provides that the remarketing agent will incur no
liability to Bank United or to any holder of the Corporate PIES or the preferred
stock in its individual capacity or as remarketing agent for any action or
failure to act in connection with a remarketing or otherwise, except as a result
of the negligence or willful misconduct on its part. The remarketing agent will
receive .50% of the amount of the proceeds received in the remarketing as its
remarketing fee.
Bank United has agreed to indemnify the remarketing agent against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the remarketing agreement.
The remarketing agreement also will provide that the remarketing agent may
resign and be discharged from its duties and obligations under the remarketing
agreement. However, no resignation will become effective unless a nationally
recognized broker-dealer has been appointed by Bank United as successor
remarketing agent and the successor remarketing agent has entered into a
remarketing agreement with Bank United. In that case, Bank United will use
reasonable efforts to appoint a successor remarketing agent and enter into a
remarketing agreement with that person as soon as reasonably practicable.
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REDEMPTION
Shares of preferred stock will not be redeemable before , 2002. On or
after that date, the shares of preferred stock will be redeemable at the option
of Bank United, in whole or in part, at any time or from time to time, on not
less than 30 or more than 60 days notice by mail, at a redemption price of $50
per share, plus accrued and unpaid dividends to the date of redemption.
On , 2004, all outstanding shares of preferred stock will be redeemed
by Bank United on not less than 30 or more than 60 days notice by mail, at a
redemption price of $50 per share, plus accrued and unpaid dividends to the date
of redemption.
After the date of a redemption, unless Bank United is in default in
providing money for the payment of the redemption price, dividends will cease to
accrue on the preferred stock, and the shares of preferred stock will no longer
be deemed to be outstanding. On that date, all rights of the preferred stock
will cease, except the right to receive the moneys payable upon redemption,
without interest, upon surrender of the certificates evidencing the shares of
preferred stock.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of Bank United,
whether voluntary or involuntary, the holders of shares of preferred stock will
be entitled to receive out of the assets of Bank United available for
distribution to stockholders the liquidation preference of $50 per share plus an
amount equal to all dividends, whether or not earned or declared, accumulated
and unpaid to the payment date before any payment or distribution of assets is
made to holders of common stock or of any other class of stock of Bank United
ranking junior to the preferred stock upon liquidation, dissolution or winding
up. If upon any liquidation, dissolution or winding up of Bank United, the
amounts payable with respect to the preferred stock and any other capital stock
ranking as to any asset distribution equally with the preferred stock are not
paid in full, the holders of the preferred stock and of that other capital stock
will share ratably in that distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the liquidation preference to which they are entitled, the
holders of shares of preferred stock will not be entitled to any further
participation in any distribution of assets of Bank United. Neither a
consolidation or merger of Bank United with another corporation nor a sale,
lease, exchange or transfer of all or part of the assets of Bank United for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of Bank United for these purposes.
The liquidation preference amount relating to the preferred stock is not
necessarily indicative of the price at which the preferred stock will actually
trade at or after the time of their issuance. The preferred stock may trade at
prices below its liquidation preference amount. The market price of the
preferred stock can be expected to fluctuate with changes in the financial
markets and economic conditions, the financial condition and prospects of Bank
United and other factors that generally influence the market prices of
securities.
VOTING RIGHTS
Each share of preferred stock will carry .10 of a vote in connection with
matters submitted generally to the holders of the common stock of Bank United,
voting together as a single class with shares of the common stock and other
capital stock of Bank United entitled to vote in respect of matters submitted to
stockholders generally. Based on the number of shares of common stock of Bank
United outstanding as of the date of this prospectus supplement and assuming
that all offered shares are issued and outstanding, the shares of preferred
stock would represent, in the aggregate, approximately % of the combined
voting power of the shares of preferred stock and the common stock.
Whenever dividends on shares of the preferred stock have not been paid in
an aggregate amount equal to at least six quarterly dividends on those shares,
whether or not consecutive, the holders of the preferred stock, voting
separately as a class with the holders of any stock ranking equally as to
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dividends with the preferred stock on which similar voting rights have been
conferred and are exercisable, will be entitled to elect two directors to the
Bank United board of directors either by written consent or at an annual or
special meeting of stockholders of Bank United held during the period those
dividends remain in arrears. These voting rights will terminate when all those
dividends accrued and in default have been paid in full or declared and funds
for their payment in full have been set apart. At that time, the term of office
of all directors so elected will also terminate.
In addition, the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of any series of preferred stock, voting as
a separate class, will be required for any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any provisions of the
certificate of incorporation of Bank United that adversely affect the powers,
preferences, privileges or rights of the holders of the preferred stock. The
affirmative vote or consent of the holders of shares representing at least
two-thirds of the combined voting power of the preferred stock and any other
series of preferred stock of Bank United ranking equally with the preferred
stock as to dividends or upon liquidation, dissolution or winding up of Bank
United, voting as a single class without regard to series, will be required to
authorize or effect (1) the creation, authorization or issuance of, and (2) the
reclassification of any authorized stock of Bank United into any obligation or
security convertible into or evidencing the right to purchase any additional
class or series of stock ranking prior to the preferred stock as to dividends or
upon liquidation, dissolution or winding up of Bank United.
Except as described above in this section on voting rights, as described in
the accompanying prospectus or as required by law, the preferred stock will have
no other voting rights.
The above provisions are not applicable to the designation by the Bank
United board of directors of any series of preferred stock other than the Series
B Preferred Stock.
BOOK-ENTRY ISSUANCE
The preferred stock will be issued as one or more global certificates
registered in the name of DTC or its nominee. The depositary for the preferred
stock will be DTC. The preferred stock will be issued only as fully-registered
securities registered in the name of Cede & Co., DTC's nominee. The preferred
stock will be issued in accordance with the procedures described under
"Book-Entry Procedures and Settlement" below.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Upon issuance, all book-entry securities will be represented by one or more
fully registered global securities, without coupons. Each global security will
be deposited with, or on behalf of, DTC, a securities depository, and will be
registered in the name of DTC or a nominee of DTC. DTC will thus be the only
registered holder of these securities.
Purchasers of securities may only hold interests in the global notes
through DTC if they are participants in the DTC system. Purchasers may also hold
interests through a securities intermediary -- banks, brokerage houses and other
institutions that maintain securities accounts for customers -- that has an
account with DTC or its nominee. DTC will maintain accounts showing the security
holdings of its participants, and these participants will in turn maintain
accounts showing the security holdings of their customers. Some of these
customers may themselves be securities intermediaries holding securities for
their customers. Thus, each beneficial owner of a book-entry security will hold
that security indirectly through a hierarchy of intermediaries, with DTC at the
"top" and the beneficial owner's own securities intermediary at the
"bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owners' securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the declaration. In most
cases, a beneficial owner will also not be able to obtain a paper certificate
evidencing the holder's ownership of securities. The book-entry system for
holding securities eliminates the need for physical movement
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of certificates and is the system through which most publicly traded securities
are held in the United States. However, the laws of some jurisdictions require
some purchasers of securities to take physical delivery of their securities in
definitive form. These laws may impair the ability to transfer book-entry
securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
o DTC is unwilling or unable to continue as depositary for such global
security and Lehman Brothers Holdings does not appoint a qualified
replacement for DTC within 90 days; or
o Bank United in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Unless we indicate otherwise, any global security that is exchangeable will
be exchangeable in whole for definitive securities in registered form, with the
same terms and of an equal aggregate principal amount. Definitive securities
will be registered in the name or names of the person or persons specified by
DTC in a written instruction to the registrar of the securities. DTC may base
its written instruction upon directions that it receives from its participants.
In this prospectus, for book-entry securities, references to actions taken
by security holders will mean actions taken by DTC upon instructions from its
participants, and references to payments and notices of redemption to security
holders will mean payments and notices of redemption to DTC as the registered
holder of the securities for distribution to participants in accordance with
DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Securities Exchange Act
of 1934. The rules applicable to DTC and it participants are on file with the
SEC.
DTC's management is aware that some computer applications, systems, and the
like for precessing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, as they relate to the timely payment of distributions to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which is expected to be completed within appropriate
time frames.
Bank United will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interest in the book-entry securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
DTC may discontinue providing its services as securities depositary at any
time by giving reasonable notice. Under such circumstances, in the event that a
successor securities depositary is not obtained, securities certificates are
required to be printed and delivered. Additionally, Bank United may decide to
discontinue use of the system of book-entry transfers through DTC or any
successor depositary with respect to the preferred securities. In that event,
certificates for the securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained form sources that Bank United believes to be reliable, but
Bank United does not take responsibility for the accuracy thereof.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the PIES, the
preferred stock and the common shares acquired under a purchase contract. Unless
otherwise stated, this summary applies only to "U.S. Holders" who purchase
Corporate PIES upon original issuance for an amount equal to the initial
offering price and who hold the PIES, the preferred stock and the common shares
acquired under the purchase contract as capital assets.
A "U.S. Holder" is:
o a person who is a citizen or resident of the United States;
o a corporation or partnership created or organized in or under the laws
of the United States or any state thereof or the District of Columbia;
o an estate the income of which is subject to United States fe deral
income taxation, regardless of its source; or
o a trust (1) that is subject to the supervision of a court with the
United States and the control of one or more United States persons as
described in Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended or (2) that has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a United States person.
The tax treatment of a holder may vary depending on the holder's particular
situation. This summary does not deal with special classes of holders. For
example, this summary does not address:
o tax consequences to holders who may be subject to special tax
treatment, such as banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in
securities or currencies, or tax-exempt investors,
o tax consequences to persons who will hold the PIES, the preferred
stock or the common shares acquired under the purchase contract as a
position in a "straddle," "synthetic security," "hedge,"
"integrated transaction," "constructive sale transaction" or
"conversion transaction,"
o tax consequences to holders of PIES, preferred stock or common shares
acquired under a purchase contract whose functional currency is not
the U.S. dollar,
o tax consequences to shareholders, partners or beneficiaries of a
holder of PIES, preferred stock or common shares acquired under a
purchase contract,
o alternative minimum tax consequences, if any, or
o the consequences of any state, local or foreign tax laws or any
federal laws other than those pertaining to the income tax.
IF YOU ARE NOT A UNITED STATES PERSON WITHIN THE MEANING OF SECTION
7701(A)(30) OF THE INTERNAL REVENUE CODE, YOU ARE URGED TO CONSULT YOUR OWN TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF AN
INVESTMENT IN THE PIES, INCLUDING THE POTENTIAL APPLICATION OF UNITED STATES
WITHHOLDING TAXES.
This summary is based upon the Internal Revenue Code, Treasury regulations,
including proposed Treasury regulations, issued thereunder, IRS rulings and
pronouncements and judicial decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. Any changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a U.S. Holder.
No statutory, administrative or judicial authority directly addresses the
treatment of the PIES or instruments similar to the PIES for United States
federal income tax purposes. As a result, we cannot assure you that the IRS will
agree with the tax consequences described in this prospectus supplement. YOU ARE
URGED TO CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO
YOU OF
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THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PIES IN LIGHT OF YOUR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
CORPORATE PIES
ALLOCATION OF PURCHASE PRICE
A U.S. Holder's acquisition of a Corporate PIES will be treated as an
acquisition of a unit consisting of the preferred stock and the purchase
contract that comprise the Corporate PIES. The purchase price of each Corporate
PIES will be allocated between the preferred stock and the purchase contract in
proportion to their respective fair market values at the time of purchase. This
allocation will establish the U.S. Holder's initial tax bases in the preferred
stock and the purchase contract. Bank United will report the fair market value
of each preferred stock as $50 and the fair market value of each purchase
contract as $0. This position will be binding upon each U.S. Holder, but not on
the IRS, unless the U.S. Holder explicitly discloses a contrary position on a
statement attached to the U.S. Holder's timely filed United States federal
income tax return for the taxable year in which a Corporate PIES is acquired.
Thus, absent that disclosure, a U.S. Holder should allocate the purchase price
for a Corporate PIES in accordance with the foregoing. The remainder of this
discussion assumes that this allocation of the purchase price will be respected
for United States federal income tax purposes.
PREFERRED STOCK
DISTRIBUTIONS
Distributions on the shares of the preferred stock, other than
distributions in redemption of shares of the preferred stock subject to section
302(b) of the Internal Revenue Code, will constitute dividends for federal
income tax purposes to the extent paid from current or accumulated earnings and
profits of Bank United, as determined under federal income tax principles. Any
corporate U.S. Holder of the shares of the preferred stock that is otherwise
eligible for the 70% dividends-received deduction under the Internal Revenue
Code will be allowed that deduction with respect to dividends on the shares of
the preferred stock.
Bank United expects that its current and accumulated earnings and profits
will be sufficient so that all distributions paid on the shares of preferred
stock will qualify as dividends for federal income tax purposes. Nevertheless,
any distributions on the shares of the preferred stock in excess of Bank
United's current and accumulated earnings and profits will, to that extent, not
be eligible for the dividends-received deduction. This excess will generally be
treated for federal income tax purposes as a tax-free return of capital, to the
extent of a U.S. Holder's basis in its shares of preferred stock, and any
additional amount as a long-term or short-term capital gain. Distributions that
are treated as a return of capital reduce a U.S. Holder's basis in the shares of
the preferred stock and may subject the U.S. Holder to the payment of tax, at
long-term or short-term capital gain rates, when distributions are made in
excess of the U.S. Holder's remaining basis in its shares of the preferred stock
or if there is a subsequent sale or redemption of the U.S. Holder's preferred
stock.
U.S. Holders should consider that the Internal Revenue Code contains
several limitations on the availability of the dividends-received deduction even
if Bank United has sufficient current or accumulated earnings and profits.
Section 246(c) of the Internal Revenue Code disallows the dividends-received
deduction with respect to any dividend on shares of stock held for 45 days or
fewer during the 90-day period beginning on the date which is 45 days before the
date on which the shares became ex-dividend with respect to the dividend. Any
period in which a U.S. Holder has an option to sell, is under a contractual
obligation to sell, has made and not closed a short sale of, or has granted
certain options to buy, substantially identical stock or securities, or held one
or more other positions in substantially similar or related property that
diminishes the risk of loss from holding the preferred stock, will not be
counted toward the 45-day holding period requirement. Furthermore, U.S. Holders
should consider section 1059 of the Internal Revenue Code, which limits the
benefit of the
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dividends-received deduction by requiring a U.S. Holder to reduce its basis in
the preferred stock with respect to certain extraordinary dividends.
In addition, Section 246A of the Internal Revenue Code reduces the
dividends-received deduction allowed to a corporate U.S. Holder that has
incurred indebtedness "directly attributable" to its investment in portfolio
stock. U.S. Holders should be aware that in February 1999, the Clinton
Administration proposed to expand the applicability of Section 246A to include a
percentage of indirect financing. The proposed legislation would apply to
portfolio stock acquired after the date of enactment. It is not possible to
predict whether legislation modifying current rules regarding debt-financed
portfolio stock will be enacted, what form the legislation might take, or what
the effective date of any future legislation might be.
SALES, EXCHANGES OR OTHER DISPOSITIONS OF PREFERRED STOCK
A U.S. Holder will recognize capital gain or loss on a sale, exchange or
other disposition of preferred stock, including the remarketing thereof, in an
amount equal to the difference between the amount realized by the U.S. Holder on
the disposition of the preferred stock and the U.S. Holder's adjusted tax basis
in the preferred stock. Selling expenses incurred by a U.S. Holder will reduce
the amount of gain or increase the amount of loss recognized upon the sale,
exchange or other disposition of the preferred stock. Capital gains of
individuals derived from capital assets held for more than one year are subject
to reduced tax rates. A U.S. Holder's ability to deduct capital losses is
subject to limitations.
REDEMPTION
A redemption of the preferred stock will be treated under Section 302 of
the Internal Revenue Code as a dividend if Bank United has sufficient earnings
and profits, unless the redemption satisfies the test set forth in Section
302(b) of the Internal Revenue Code enabling the redemption to be treated as a
sale or exchange. The redemption will satisfy this test only if it (1) is
"substantially disproportionate," (2) constitutes a "complete termination of
the holder's stock interest" in Bank United or (3) is "not essentially
equivalent to a dividend," each within the meaning of Section 302(b). In
determining whether any of these tests are met, shares considered to be owned by
the U.S. Holder by reason of certain constructive ownership rules set forth in
the Internal Revenue Code, as well as shares actually owned, must generally be
taken into account. Because the determination as to whether any of the
alternative tests of Section 302(b) of the Internal Revenue Code is satisfied
with respect to a particular holder of the preferred stock will depend on the
facts and circumstances as of the time the determination is made, U.S. Holders
are advised to consult their own tax advisors to determine their tax treatment
in light of their own particular investment circumstances.
PURCHASE CONTRACTS
INCOME FROM CONTRACT ADJUSTMENT PAYMENTS
There is no direct authority addressing the treatment of the contract
adjustment payments under current law, and the treatment is unclear. Contract
adjustment payments may constitute taxable income to a U.S. Holder when received
or accrued, in accordance with the U.S. Holder's method of tax accounting. If
Bank United is required to file information returns with respect to contract
adjustment payments, it intends to report the contract adjustment payments as
taxable income to each U.S. Holder. U.S. Holders should consult their own tax
advisors concerning the treatment of contract adjustment payments, including the
possibility that any payment may be treated as a loan, purchase price
adjustment, rebate or payment analogous to an option premium, rather than being
includible in income on a current basis. The treatment of contract adjustment
payments could affect a U.S. Holder's tax basis in a purchase contract or, in
the common shares acquired under a purchase contract or the amount realized by a
U.S. Holder upon the sale or disposition of a PIES or the termination of a
purchase contract. See "-- Acquisition of common stock under a purchase
contract," "-- Termination of purchase contract" and "-- Sale or disposition
of PIES" below.
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ACQUISITION OF COMMON STOCK UNDER A PURCHASE CONTRACT
A U.S. Holder generally will not recognize gain or loss on the purchase of
shares of common stock under a purchase contract, except with respect to any
cash paid in lieu of a fractional share of common stock. Subject to the
discussion in this section, a U.S. Holder's aggregate initial tax basis in the
shares of common stock acquired under a purchase contract generally should equal
the purchase price paid for the shares of common stock plus the U.S. Holder's
tax basis in the purchase contract, if any, less the portion of the purchase
price and tax basis allocable to the fractional share. Payments of contract
adjustment payments that have been received in cash by a U.S. Holder but not
included in income should reduce the U.S. Holder's tax basis in the purchase
contract or in the shares of common stock to be received under the purchase
contract. See "-- Income from contract adjustment payments," above. The
holding period for shares of common stock acquired under a purchase contract
will commence on the date of the acquisition of those shares of common stock.
OWNERSHIP OF COMMON STOCK ACQUIRED UNDER THE PURCHASE CONTRACT
Any dividend on common shares paid by Bank United out of its current or
accumulated earnings and profits, as determined for United States federal income
tax purposes, will be includible in income by the U.S. Holder when received. Any
dividend includible in income will be eligible for the dividends received
deduction if received by an otherwise qualifying corporate U.S. Holder that
meets the holding period and other requirements for the dividends received
deduction.
Upon a sale or other disposition of shares of common stock, a U.S. Holder
generally will recognize capital gain or loss equal to the difference between
the amount realized and the U.S. Holder's adjusted tax basis in the common
shares. Capital gains of individuals derived in respect of capital assets held
for more than one year are subject to reduced tax rates. The deductibility of
capital losses is subject to limitations.
EARLY SETTLEMENT OF PURCHASE CONTRACT
A U.S. Holder will not recognize gain or loss on the receipt of the U.S.
Holder's proportionate share of preferred stock or Treasury Securities upon
early settlement of a purchase contract, and the holder will have the same tax
basis in the preferred stock or Treasury Securities as the holder had before the
early settlement.
TERMINATION OF PURCHASE CONTRACT
If a purchase contract terminates, a U.S. Holder will recognize capital
gain or loss equal to the difference between the amount realized, if any, upon
such termination and the U.S. Holder's adjusted tax basis, if any, in the
purchase contract at the time of the termination. Any contract adjustment
payments received by a U.S. Holder but not included in income should either
reduce the U.S. Holder's tax basis in the purchase contract or result in an
amount realized on the termination of the purchase contract. Any contract
adjustment payments included in a U.S. Holder's income but not paid should
increase the U.S. Holder's tax basis in the purchase contract (see "-- Income
from contract adjustment payments" above). Capital gains of individuals derived
in respect of capital assets held for more than one year are subject to reduced
maximum tax rates. A U.S. Holder's ability to deduct capital losses is subject
to limitations. A U.S. Holder will not recognize gain or loss on the receipt of
the U.S. Holder's proportionate share of preferred stock or Treasury Securities
upon termination of the purchase contract and will have the same tax basis in
that preferred stock or Treasury Securities as before the distribution.
If a termination of the purchase contract occurs when it has negative
value, see "-- Sale or Disposition of PIES" below. U.S. Holders should consult
their tax advisors regarding a termination of the purchase contract at a time
when the purchase contract has negative value.
S-47
<PAGE>
ADJUSTMENT TO SETTLEMENT RATE
U.S. Holders of PIES might be treated as receiving a constructive
distribution from Bank United if (1) the Settlement Rate is adjusted and as a
result of the adjustment the proportionate interest of U.S. Holders of PIES in
the assets or earnings and profits of Bank United is increased and (2) the
adjustment is not made pursuant to a bona fide, reasonable anti-dilution
formula. An adjustment in the Settlement Rate would not be considered made
pursuant to a bona fide formula if the adjustment were made to compensate a U.S.
Holder for certain taxable distributions with respect to the common shares.
Thus, under certain circumstances, an increase in the Settlement Rate might give
rise to a taxable dividend to U.S. Holders of PIES even though the U.S. Holders
would not receive any cash related thereto.
TREASURY PIES
SUBSTITUTION OF TREASURY SECURITIES TO CREATE TREASURY PIES
A U.S. Holder of Corporate PIES that delivers Treasury Securities to the
securities intermediary in substitution for the preferred stock generally will
not recognize gain or loss upon the delivery of the Treasury Securities or the
release of the preferred stock to the U.S. Holder. The U.S. Holder will continue
to include in income any dividends on the preferred stock, and the U.S. Holder's
basis in the preferred stock and the purchase contract will not be affected by
the delivery and release.
OWNERSHIP OF TREASURY SECURITIES
A U.S. Holder's initial tax basis in the Treasury Securities that are part
of the Treasury PIES will be equal to the amount paid for the Treasury
Securities. A U.S. Holder generally will include in income any original issue
discount or acquisition discount includible with respect to the Treasury
Securities. In general, a U.S. Holder will be required to include in income each
year that the U.S. Holder holds a Treasury Security the portion of the original
issue discount or acquisition discount that accrues on the Treasury Security in
that year.
SUBSTITUTION OF PREFERRED STOCK TO RECREATE CORPORATE PIES
A U.S. Holder of Treasury PIES that delivers preferred stock to the
securities intermediary to recreate Corporate PIES generally will not recognize
gain or loss upon the delivery of such preferred stock or the release of the
Treasury Securities to the U.S. Holder. The U.S. Holder will continue to include
in income any interest, original issue discount or acquisition discount with
respect to such Treasury Securities and the U.S. Holder's tax basis in the
Treasury Securities, the preferred stock and the purchase contract will not be
affected by such delivery and release.
SALE OR DISPOSITION OF PIES
Upon a disposition of PIES, a U.S. Holder will be treated as having sold,
exchanged or disposed of the purchase contracts and the preferred stock, or, in
the case of Treasury PIES, the Treasury Securities that comprise those PIES and
generally will have capital gain or loss equal to the difference between the
portion of the proceeds to the U.S. Holder allocable to the purchase contracts
and the preferred stock or Treasury Securities, as the case may be, and the U.S.
Holder's respective adjusted tax bases in the purchase contract and the
preferred stock or Treasury Securities. For purposes of determining gain or
loss, the U.S. Holder's proceeds will not include any amount equal to accrued
and unpaid interest on the Treasury Securities not previously included in
income, which amount will be treated as ordinary interest income. Capital gains
of individuals derived in respect of capital assets held for more than one year
are taxed at a reduced tax rate. The deductibility of capital losses is subject
to limitations. If a disposition of the PIES occurs when the purchase contract
has negative value, the U.S. Holder should be considered to have received
additional consideration for the preferred stock or Treasury Securities in an
amount equal to the negative value and to have paid the amount to be released
from the U.S. Holder's obligation under the purchase contract. U.S. Holders
should consult
S-48
<PAGE>
their tax advisors regarding a disposition of the PIES at a time when the
purchase contract has negative value.
Payments to a U.S. Holder of contract adjustment payments that have not
previously been included in the income of the U.S. Holder should either reduce
the U.S. Holder's tax basis in the purchase contract or result in an increase in
the amount realized on the disposition of the purchase contract. Any contract
adjustment payments included in a U.S. Holder's income but not paid should
increase the U.S. Holder's tax basis in the purchase contract. See
"-- Corporate PIES -- Purchase contracts -- Income from contract adjustment
payments."
NON-UNITED STATES HOLDERS
The following summary discusses the tax consequences to Non-United States
Holders. You are a "Non-United States Holder" if you are not a U.S. Holder. As
discussed above, the PIES will be treated by the holders and by Bank United as a
unit consisting of a purchase contract and preferred stock or Treasury Security,
as the case may be. The following discussion is subject to the discussion below
concerning backup withholding.
Under present United States federal income tax laws, a Non-United States
Holder generally will be subject to United States federal income tax withholding
on dividend payments on the holder's preferred stock and any contract adjustment
payments at a rate of 30%. A Non-United States Holder may reduce or eliminate
the 30% withholding tax on dividends and contract adjustment payments discussed
above if the holder provides Bank United, or its paying agent, as the case may
be, with a properly executed:
o IRS Form W-8 or a substantially similar form,
o IRS Form 1001 (or successor form) properly claiming an exemption from,
or a reduction of, such withholding tax under the benefit of an
applicable tax treaty, or
o IRS Form 4224 (or successor form) stating that payment with respect to
the PIES, preferred stock, or common shares is not subject to
withholding tax because it is effectively connected with the
beneficial owner's conduct of a trade or business in the United
States.
Under future regulations generally applicable to payments made after
December 31, 2000, Non-United States Holders will generally be required to
provide an IRS Form W-8 in lieu of IRS Form 1001 and IRS Form 4224, although
alternative documentation may be applicable in certain situations. The future
regulations also modify certain certification requirements.
Generally, a Non-United States Holder will not be subject to United States
federal income taxes on any amount that constitutes gain upon a sale, exchange,
or other disposition of a PIES, preferred stock, Treasury Security or common
shares, provided the gain is not effectively connected with the conduct of a
trade or business in the United States by the Non-United States Holder. Certain
other exceptions may be applicable, and a Non-United States Holder should
consult its tax advisor in this regard. However, as discussed previously, a
redemption of the preferred stock may be treated as a dividend, for federal
income tax purposes, and therefore may be subject to withholding on dividend
payments as described above. See "Corporate PIES -- Preferred stock
redemption".
Finally, Bank United does not believe it is a "United States real property
holding corporation" for federal income tax purposes. However, if Bank United
is, was, or becomes, during the five year period preceding that disposition, a
"United States real property holding corporation," a Non-United States Holder
who holds or held more than five percent of the class of stock will be subject
to federal tax on the sale or other disposition of such stock, and those holders
should contact their tax advisors.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments under the PIES, the preferred stock or the common shares acquired
under a purchase contract, the proceeds received with respect to a fractional
common share upon settlement of a purchase contract, and the sale of the PIES,
the preferred stock or the common shares acquired under
S-49
<PAGE>
a purchase contract may be subject to information reporting and United States
federal backup withholding tax at the rate of 31% if the U.S. Holder thereof
fails to supply an accurate taxpayer identification number or otherwise fails to
comply with applicable United States information reporting or certification
requirements. No information reporting or backup withholding will be required
with respect to payments made by Bank United or any paying agent to Non-United
States Holders if a statement described above under "Non-United States
Holders" has been received and the payor does not have actual knowledge, or,
after December 31, 2000, reason to know, that the beneficial owner is a U.S.
Holder. Any amounts so withheld will be allowed as a credit against a U.S.
Holder's United States federal income tax liability.
ERISA CONSIDERATIONS
In this section, the term "Plans" means employee benefit plans that are
subject to the Employee Retirement Income Security Act of 1974 ("ERISA"),
plans, individual retirement accounts and other arrangements that are subject to
Section 4975 of the Internal Revenue Code and other entities whose underlying
assets are considered to include "plan assets" of those plans, accounts and
arrangements.
Generally, a Plan may purchase the Corporate PIES subject to the
determination by the investing fiduciary of the Plan that the Plan's investment
in the Corporate PIES satisfies ERISA's fiduciary responsibility requirements
and other requirements applicable to investments by Plans. Accordingly, among
other factors, the investing fiduciary should consider whether the investment
would satisfy the prudence and diversification requirements of ERISA and would
be consistent with the documents and instruments governing the Plan.
Under regulations issued by the U.S. Department of Labor, in the case of an
investment by a Plan in an equity interest of an entity that is not a
"publicly-offered security," the Plan's assets include both the equity
interest and an undivided interest in each of the entity's underlying assets,
unless it is established that the entity is an "operating company" or equity
participation in the entity by benefit plan investors is not significant.
In order to be considered "publicly-offered securities," the Corporate
PIES must be:
o freely transferrable,
o part of a class of securities that is widely held, and
o either (a) part of a class of securities registered under section
12(b) or 12(g) of the Securities Exchange Act of 1934 or (b) sold to
the Plan as part of an offering of securities to the public pursuant
to an effective registration statement under the Securities Act, as
long as the class of securities is registered under the Securities
Exchange Act within 120 days after the end of the relevant issuer's
fiscal year.
In order to be considered an "operating company," Bank United must be an
entity that is primarily engaged, directly or through a majority owned
subsidiary or subsidiaries, in the production or sale of a product or service
other than the investment of capital.
Under the regulations issued by the U.S. Department of Labor, an entity's
assets will not be deemed to be plan assets if ownership of the entity by Plans
is not "significant." In general, equity participation in an entity by a Plan
is not significant on any date if, immediately after the most recent acquisition
of an equity interest in an entity, less than 25% of the value of each class of
equity interests in the entity is held by Plans. No monitoring or other measures
will be taken to determine or ensure that the requirements of this or any other
exception are met with respect to the Corporate PIES. Accordingly, no assurances
can be given that an exception will apply to all or any transactions involving
these assets.
In addition, Section 406 of ERISA and Section 4975 of the Internal Revenue
Code prohibit Plans from engaging in specified transactions involving plan
assets with persons or entities who are "parties in interest," within the
meaning of ERISA, or "disqualified persons," within the meaning of Section
S-50
<PAGE>
4975 of the Internal Revenue Code. The acquisition and/or ownership, or the
sale, of the Corporate PIES by a Plan with respect to which Bank United, another
entity affiliated with the Corporate PIES or any of their respective affiliates
is considered a party in interest or a disqualified person may constitute or
result in a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Internal Revenue Code, unless those Corporate PIES are acquired and are held
in accordance with an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the Department of Labor has issued
prohibited transaction class exemptions, which are called "PTCEs," that may
apply to the acquisition and holding of the Corporate PIES. These class
exemptions include PTCE 84-14 respecting transactions determined by independent
qualified professional asset managers, PTCE 90-1 respecting insurance company
pooled separate accounts, PTCE 91-38 respecting bank collective investment trust
funds, PTCE 95-60 respecting life insurance company general accounts and PTCE
96-23 respecting transactions determined by in-house asset managers.
Any fiduciary proposing to acquire the Corporate PIES for or on behalf of a
Plan, directly or indirectly, should consult with ERISA counsel for the Plan and
should not acquire the Corporate PIES unless it is determined that the
acquisition and holding of the Corporate PIES by the Plan:
o does not and will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Internal
Revenue Code and
o will satisfy the applicable fiduciary requirements imposed under ERISA.
Any acquisition of Corporate PIES by a Plan will be deemed a representation
by the Plan and the fiduciary effecting the investment for or on behalf of the
Plan that the acquisition and holding satisfies the applicable fiduciary
requirements of ERISA and is either (1) not a prohibited transaction under ERISA
or the Internal Revenue Code and is otherwise permissible under applicable law
or (2) entitled to exemptive relief from the prohibited transaction provisions
of ERISA and the Internal Revenue Code in accordance with one or more of the
PTCEs mentioned above or another available statutory, class or individual
prohibited transaction exemption.
UNDERWRITING
Bank United has entered into an underwriting agreement with Lehman
Brothers, pursuant to which, and subject to its terms and conditions, Bank
United has agreed to sell to Lehman Brothers and Lehman Brothers has agreed to
purchase from Bank United all of the Corporate PIES.
The underwriting agreement provides that the obligation of Lehman Brothers
to purchase the Corporate PIES is subject to the satisfaction of certain
conditions, including the approval of certain legal matters by its counsel.
Subject to the terms and conditions of the underwriting agreement, Lehman
Brothers must purchase all of the Corporate PIES if it purchases any of them.
Lehman Brothers has advised Bank United that it will offer the Corporate
PIES directly to the public initially at the offering price and to certain
dealers at the offering price less a selling concession not to exceed $ per
Corporate PIES. Lehman Brothers may allow and these dealers may reallow a
concession not to exceed $ per Corporate PIES to other dealers. After the
initial offering of the Corporate PIES, Lehman Brothers may change the public
offering price, the concession to selected dealers and the reallowance to other
dealers.
The following table shows the underwriting discount that Bank United will
pay to Lehman Brothers in connection with this offering. The amounts below
represent the underwriting discount assuming both exercise and no exercise of
the option of Lehman Brothers to purchase an additional 300,000 Corporate PIES
to cover over-allotments.
<TABLE>
<CAPTION>
WITHOUT OVER-ALLOTMENT WITH OVER-ALLOTMENT
---------------------- -------------------
<S> <C> <C>
Per Corporate PIES................... $ $
Total................................ $ $
</TABLE>
S-51
<PAGE>
Bank United estimates that its expenses in connection with the offering of
the Corporate PIES will be approximately $ .
Bank United has granted to Lehman Brothers an option to purchase an
aggregate of up to an additional 300,000 Corporate PIES solely to cover
over-allotments, at the initial offering price to the public. Any or all of the
option may be exercised at any time on or before 30 days after the date of the
underwriting agreement. To the extent that the option is exercised, Lehman
Brothers will be committed, subject to certain conditions, to purchase up to
that number of additional Corporate PIES.
Bank United has agreed to indemnify Lehman Brothers against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments which Lehman Brothers would be required to make regarding any
liabilities that it may have under the Securities Act.
Before this offering, there has been no public market for the Corporate
PIES. We have applied to have the Corporate PIES listed on the NYSE. Trading of
the Corporate PIES on the New York Stock Exchange is expected to commence within
a 5-day period after the initial delivery of the Corporate PIES. In order to
meet one of the requirements for listing on the NYSE, Lehman Brothers has
undertaken to sell the Corporate PIES to a minimum of 400 beneficial owners.
Lehman Brothers has advised Bank United that it presently intends to make a
market in the Corporate PIES as permitted by applicable laws and regulations.
Lehman Brothers is not obligated to make a market in the Corporate PIES,
however, and it may discontinue this market making at any time in its sole
discretion. Accordingly, Bank United cannot assure investors that there will be
adequate liquidity or adequate trading markets for the Corporate PIES.
In connection with the offering of the Corporate PIES, Lehman Brothers may
engage in certain transactions that stabilize the price of the Corporate PIES
and the common stock. These transactions may consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Corporate PIES
and the common stock. If Lehman Brothers creates a short position in the
Corporate PIES or common stock in connection with this offering, by selling more
Corporate PIES than are listed on the cover page of this prospectus supplement
or by selling common stock that it does not own, then Lehman Brothers may reduce
that short position by purchasing Corporate PIES or common stock in the open
market. In general, the purchase of a security for the purpose of stabilization
or reducing a short position could cause the price of that security to be higher
than it might otherwise be in the absence of those purchases.
In addition, in connection with this offering, Lehman Brothers and selling
group members may engage in passive marketing making transactions in the common
stock on the Nasdaq National Market, before the pricing and completion of this
offering. Passive market making consists of displaying bids on the Nasdaq
National Market no higher than the bid prices of independent market makers and
making purchases at prices no higher than those independent bids and effected in
response to order flow. Net purchases by a passive market maker on each day are
limited to a specified percentage of the passive market maker's average daily
trading volume in the common stock during a specified period and must be
discontinued when that limit is reached. Passive market making may cause the
price of the common stock to be higher than the price that otherwise would exist
in the open market in the absence of those transactions.
S-52
<PAGE>
Lehman Brothers and Bank United have agreed that, unless Bank United
receives the prior written consent of Lehman Brothers, Bank United may not,
during the period ending 90 days after the date of this prospectus supplement:
o directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any PIES, common stock, purchase contracts or
preferred stock of any series other than the series of preferred stock
which is the subject of a concurrent offering described in this
prospectus supplement, or any securities of Bank United similar to the
PIES, purchase contracts or preferred stock of any of those series, or
any security convertible into or exercisable or exchangeable for PIES,
common stock purchase contracts or preferred stock of any of those
series, or file any registration statement under the Securities Act
with respect to any of the above, however,
the restrictions described in the previous paragraph do not apply to:
o the sale of the PIES to Lehman Brothers as underwriter,
o Treasury PIES or Corporate PIES that may be created or recreated upon
substitution of pledged securities or common stock issuable upon early
settlement of the Corporate PIES or Treasury PIES,
o any share of common stock, or options to purchase any shares of common
stock, issued in a merger involving Bank United, in an acquisition
transaction or in specified similar transactions,
o any shares of common stock issued, or options to purchase any shares
of common stock granted, under existing employee benefit plans or
o any shares of common stock issued under any non-employee director
stock plan or dividend reinvestment plan.
Neither Bank United nor Lehman Brothers makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Corporate PIES. In addition,
neither Bank United nor Lehman Brothers makes any representation that anyone
will engage in these transactions or that these transactions, once they have
begun, will not be discontinued without notice.
Lehman Brothers has, directly and indirectly, provided investment and
commercial banking or financial advisory services to Bank United and its
affiliates, for which it has received customary fees and commissions, and
expects to provide these services to Bank United and its affiliates in the
future, for which it expects to receive customary fees and commissions.
Certain wholly owned subsidiaries of Lehman Brothers Inc. own an aggregate
of 1,529,557 shares of common stock of Bank United, which represents 5.4% of the
outstanding common stock.
LEGAL MATTERS
The validity of the PIES, the purchase contracts, the common stock and the
preferred stock which are being offered will be passed upon for us by Wachtell,
Lipton, Rosen & Katz, New York, New York. Certain legal matters will be passed
upon for Lehman Brothers by Simpson Thacher & Bartlett, New York, New York.
S-53
<PAGE>
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus supplement by reference from Bank United Corp.'s
Annual Report on Form 10-K for the year ended September 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this prospectus supplement, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated in this
prospectus supplement by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their report included in Bank United Corp.'s
Quarterly Report on Form 10-Q they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
for their reports on the unaudited interim financial information because those
reports are not "reports" or a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
S-54
<PAGE>
================================================================================
2,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIESSM")
CONSISTING OF 2,000,000 CORPORATE PIES
[BANK UNITED CORP. LOGO]
---------------------------
PROSPECTUS SUPPLEMENT
, 1999
---------------------------
LEHMAN BROTHERS INC.
================================================================================
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 3, 1999
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED ______________, 1999)
2,000,000 SHARES
SERIES A PREFERRED STOCK
BANK UNITED CORP.
Bank United Corp. is selling 2,000,000 shares of its Series A preferred
stock. All of the shares of preferred stock will have a liquidation preference
of $50 per share. In this prospectus supplement, we refer to Bank United Corp.
as "Bank United".
Dividends on the preferred stock are cumulative from the date of issue and
will be payable on February , May , August and November of each year,
beginning on November , 1999, at the annual rate of % through the dividend
payment date on February , 2000, and thereafter at the annual rate of %.
The preferred stock is redeemable at any time on or after February , 2000
at 100% of its liquidation preference plus accrued dividends to the redemption
date. The preferred stock will be subject to mandatory redemption in full on
August , 2004 at the same price.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -------------
<S> <C> <C>
Public Offering Price................... $ $
Underwriting Discount................... $ $
Proceeds to Bank United................. $ $
</TABLE>
Any accumulated dividend payments on the preferred stock from
, 1999 should be added to the Public Offering Price.
Bank United has granted the underwriter a 30-day option to purchase up to
additional shares of preferred stock on the same terms and
conditions described above solely to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Lehman Brothers Inc. expects to deliver the preferred stock through the book
entry system of The Depository Trust Company on or about ,
1999.
LEHMAN BROTHERS
, 1999
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus contain
information about Bank United and about the preferred stock. They also refer to
information contained in other documents filed by Bank United with the
Securities and Exchange Commission. References to this prospectus supplement or
the prospectus also mean the information contained in those other documents. If
this prospectus supplement is inconsistent with the prospectus or the documents
incorporated herein by reference, rely on this prospectus supplement.
You should rely on the information in this prospectus supplement or the
accompanying prospectus or in documents that are incorporated by reference into
the prospectus. Neither Bank United nor the underwriter has authorized anyone to
provide any different or additional information. We are not making an offer of
the preferred stock in any jurisdiction where the offer is not permitted. You
should not assume that information in these documents is correct or complete
after the date of this prospectus supplement.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
<S> <C>
PAGE
----
Prospectus Supplement Summary........ S-3
Use of Proceeds...................... S-10
Capitalization....................... S-10
Description of the Preferred Stock... S-11
Book-Entry Procedures and
Settlement......................... S-13
Underwriting......................... S-15
United States Federal Income Tax
Consequences....................... S-16
Legal Matters........................ S-17
Experts.............................. S-17
PROSPECTUS
PAGE
----
Risk Factors......................... 1
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Dividends.... 4
Bank United Corp. ................... 5
Bank United Capital Trust............ 6
Description of Offered Securities.... 8
Relationship Among the Trust
Preferred Securities, the Trust
Preferred Securities Guarantee and
the Junior Subordinated Notes Held
by Bank United Capital Trust....... 33
Selling Stockholders................. 34
Plan of Distribution................. 35
Legal Matters........................ 36
Experts.............................. 36
Forward-Looking Information.......... 36
About this Prospectus................ 37
Where You Can Find More
Information........................ 38
</TABLE>
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified by the more detailed information and the
consolidated financial statements of Bank United appearing elsewhere in this
prospectus supplement or the accompanying prospectus or incorporated by
reference in the accompanying prospectus.
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At June 30, 1999, we operated a 144-branch community banking network serving
nearly 284,000 households, as well as 18 commercial banking offices in 15 states
across the country. As of June 30, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $15.4 billion in assets, $7.2
billion in deposits and $732.8 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027, and our telephone
number is (713) 543-6500.
Our bank subsidiary's capital levels at June 30, 1999 and September 30,
1998 qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. Our bank subsidiary's capital ratios at June
30, 1999 and September 30, 1998 and the applicable regulatory capital
requirements were as follows:
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
--------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Tangible capital..................... 6.60% 6.75% 1.50% --
Core/Leverage capital................ 6.62% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.29% 9.97% -- 6.00%
Total risk-based capital............. 11.24% 10.48% 8.00% 10.00%
</TABLE>
RECENT DEVELOPMENTS
The following are selected financial data for the periods indicated. The
selected consolidated financial data as of June 30, 1999 and for the nine months
ended June 30, 1999 and 1998, respectively, are taken from our unaudited
consolidated financial statements, which in our opinion contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for these periods. These results of operations for
the nine months ended June 30, 1999 are not necessarily indicative of the
results of operations that may be obtained for the entire fiscal year. The
selected consolidated financial data as of September 30, 1998 are taken from
financial statements audited by Deloitte & Touche LLP, independent auditors,
which are incorporated into this prospectus supplement by reference.
<TABLE>
<CAPTION>
AT AT
JUNE 30, SEPTEMBER 30,
1999 1998
----------- --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF FINANCIAL CONDITION
DATA:
Total assets....................... $15,426,756 $ 13,664,992
Mortgage-backed securities......... 1,069,315 932,058
Loans.............................. 12,386,846 10,803,744
Deposits........................... 7,213,264 6,798,237
Borrowings......................... 7,022,728 5,963,751
Minority interest, Bank Preferred
Stock........................... 185,500 185,500
Total stockholders' equity......... 732,822 684,412
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net interest income................ $ 247,745 $ 214,589
Provision for credit losses........ 17,977 16,777
Non-interest income................ 88,563 54,110
Non-interest expense............... 172,338 138,783
Income before income taxes and
minority interest............... 145,993 113,139
Net income......................... 77,309 90,645
Net income applicable to common
shares............................. 77,309 90,645
Basic earnings per common share.... 2.45 2.87
Diluted earnings per common
share.............................. 2.40 2.80
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
OTHER DATA:
Mortgage servicing
portfolio -- period end......... $30,609,155 $ 29,349,450
Common shares outstanding
Period end...................... 31,703,646 31,595,596
Average-- basic................. 31,606,979 31,595,596
Average-- diluted............... 32,239,062 32,360,747
Book value-- period end............ 23.11 21.19
Tangible book value-- period end... 20.41 19.25
</TABLE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED JUNE 30,
-----------------------------
1999 1998
----------- --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
CERTAIN RATIOS:
Return on average assets........... 0.83% 1.11%
Return on average common equity.... 14.48 19.18
Stockholders' equity to assets..... 4.75 5.11
Net yield on interest-earning
assets............................. 2.45 2.44
Efficiency ratio................... 49.93 50.23
Allowance for credit losses to net
nonaccrual loans................ 84.67 67.55
Allowance for credit losses total
loans........................... 0.51 0.46
Net loan charge-offs to average
loans........................... 0.05 0.15
Nonperforming assets to total
assets............................. 0.65 0.65
REGULATORY CAPITAL RATIOS OF THE
BANK:
Tangible capital................... 6.60 7.03
Core capital....................... 6.62 7.06
Total risk-based capital........... 11.24 10.93
</TABLE>
Net income was $77.3 million or $2.40 per diluted share for the nine months
ended June 30, 1999, compared to $90.6 million or $2.80 per diluted share for
the nine months ended June 30, 1998.
S-4
<PAGE>
Two positive income tax adjustments totalling $33.5 million recorded during the
nine months ended June 30, 1998 were the principal reasons for the decrease. Net
interest income increased $15% or $33.2 million due to higher levels of
interest-earning assets, particularly in the commercial lending businesses.
Non-interest income increased $34.5 million or 64%, due to an increase in the
servicing portfolio and the average service fee rates as well as increased
mortgage banking gains resulting from single family loan sales in the normal
course of business. Non-interest expenses increased $33.5 million, or 24%, due
primarily to higher levels of loan activity and community bank branch expansion.
Net income was $24.8 million or $0.77 per diluted share for the quarter
ended June 30, 1999, compared to $23.9 million or $0.74 per diluted share for
the quarter ended June 30, 1998. Higher levels of interest-earning assets and an
increase in the net yield to 2.57% produced a 17% or $13.0 million increase in
net interest income. Partially offsetting this increase was a $12.3 million
increase in non-interest expense, primarily due to higher levels of loan
activity and community bank branch expansion.
Total assets increased $1.8 billion to $15.4 billion at June 30, 1999 from
$13.6 billion at September 30, 1998. This increase occurred primarily due to
growth in the commercial loan portfolio. FHLB advances and higher deposit levels
were the principal source of funds used to finance this growth.
THE OFFERING
We are selling 2,000,000 shares of our Series A preferred stock in this
offering. All of the shares of preferred stock will have a liquidation
preference of $50 per share. Dividends on the preferred stock will be payable on
February , May , August and November of each year, beginning on November
, 1999, at the annual rate of % through the dividend payment date on
, 2000, and thereafter at the annual rate of %. The preferred stock
is redeemable at our option at any time on or after February , 2000 at 100% of
its liquidation preference plus accrued dividends to the redemption date. The
preferred stock will be subject to mandatory redemption in full on August ,
2004 at the same price. Each share of preferred stock will have the right to
vote together with our common stockholders on all matters submitted generally to
our stockholders for a vote, and will be entitled to vote separately as a class
with respect to certain matters affecting the interests of preferred
stockholders. Preferred stockholders will also be entitled to elect two
additional directors to our board if we fail to pay dividends on the preferred
stock for six quarters.
CONCURRENT OFFERING
We are also offering, in a concurrent offering, $100 million of our Premium
Income Equity SecuritiesSM ("PIESSM"). Each PIES consists of a unit comprised
of a stock purchase contract and a share of preferred stock, each issued by Bank
United. The stock purchase contract requires the holder to purchase shares of
common stock from Bank United prior to August , 2002. The number of shares of
common stock that each holder will be required to purchase pursuant to the stock
purchase contract will be determined based on the average closing price of the
common stock during a specified 20-day trading period. The preferred stock,
which will be pledged to secure each holder's obligations under the related
stock purchase contract, will pay dividends quarterly at the annual rate of %
through , 2002, and thereafter at a reset rate set through a
remarketing process. The preferred stock will be subject to mandatory redemption
on , 2004 at a price equal to % of its liquidation preference plus
accrued dividends to the redemption date.
USE OF PROCEEDS
The estimated net proceeds from the sale of the preferred stock, after
deducting underwriting discounts and estimated fees and expenses, are expected
to be approximately $ million, or
S-5
<PAGE>
$ million if the underwriter's over-allotment option is exercised in full.
See "Use of Proceeds" on page S-10. We intend to use these net proceeds for
general corporate purposes.
SELECTED FINANCIAL DATA OF BANK UNITED
The following selected financial data for each of the years ended September
30, 1994 through 1998 are derived from the audited consolidated financial
statements of Bank United. The following selected financial data for the six
months ended March 31, 1999 and March 31, 1998 are derived from the unaudited
consolidated financial statements of Bank United and include, in the opinion of
the management of Bank United, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the data of those periods.
The information that appears below is only a summary and should be read in
conjunction with the consolidated financial statements, the notes to those
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" incorporated by reference into this
prospectus supplement.
In reading the following selected financial information for Bank United,
please note the following:
o During fiscal 1997, Bank United sold some of its mortgage origination
offices. In connection with this sale, the remaining offices were
restructured or closed. The mortgage origination branches shown at
March 31, 1999 and 1998 and September 30, 1998 and 1997 are wholesale
mortgage origination offices, which are currently part of the
Financial Markets Group. See "Sale of mortgage offices" and
"Restructuring charges" items in the Summary of Operations.
o In connection with its acquisition, Bank United issued to the Federal
Deposit Insurance Corporation, as manager of the Federal Savings and
Loan Insurance Corporation Resolution Trust Fund, a warrant to acquire
158,823 shares of common stock of Bank United. Payments in lieu of
dividends related to the warrant, which was redeemed in August 1996.
See "Payments in lieu of dividends" item in the Summary of
Operations.
o The extraordinary loss appearing under "Extraordinary loss -- early
extinguishment of debt" in the Summary of Operations represents costs
and charges associated with the repurchase and retirement of a
majority of the senior notes of Bank United.
o Effective October 1, 1997, Bank United adopted Statement of Financial
Accounting Standard ("SFAS") No. 128, "Earnings per share," which
establishes standards for computing and presenting earnings per share
("EPS"). It requires dual presentation of basic and diluted EPS for
entities with complex capital structures. All prior period EPS data
were restated to comply with SFAS No. 128, but are not materially
different. See "Earnings per common share" item in the Summary of
Operations.
o "Return on average assets" under Certain Ratios and Other Data is
net income without deduction of minority interest, divided by average
total assets.
o "Net operating expense ratio" under Certain Ratios and Other Data is
total non-interest expense, less total non-interest income, as a
percentage of average assets for each period.
o "Efficiency ratio" under Certain Ratios and Other Data is
non-interest expense excluding goodwill amortization, divided by net
interest income plus non-interest income, excluding the gain on the
sale of mortgage offices.
o Adjusting items under Certain Ratios and Other Data-Excluding
Adjusting Item are composed of the following for fiscal 1999, 1998,
1997, 1996 and 1994:
o 1999, decreased EPS $0.08: court of claims litigation expense
totaling $4.1 million, $2.6 million net of tax;
S-6
<PAGE>
o 1998, increased EPS $0.76:
(1) two positive income tax adjustments totaling $33.5 million,
(2) an increase in the commercial loan allowance of $7.8
million, $4.9 million net of tax and
(3) provisions for the impact of higher prepayments on the
single family loan and servicing portfolios totaling
$6.7 million, $4.2 million net of tax;
o 1997, increased EPS $0.02:
(1) the gain on the sale of mortgage offices of $4.7 million, $2.9
million net of tax and
(2) an extraordinary loss on extinguishment of debt of $3.6
million, $2.3 million net of tax.
o 1996, increased EPS $2.05:
(1) a one-time SAIF assessment charge of $33.7 million, $20.7
million net of tax,
(2) compensation expense of $7.8 million, $4.8 million net of
tax,
(3) charges totaling $12.5 million, $7.7 million net of
tax, related to the restructuring of and items
associated with the mortgage origination business,
(4) a contractual payment to previous minority interests of
$5.9 million, and
(5) an income tax benefit of $101.7 million;
o 1994, increased EPS $1.90: an income tax benefit of $58.2 million.
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
AT MARCH 31, ---------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
SUMMARY OF FINANCIAL CONDITION
ASSETS
Cash and cash equivalents............... $ 237,251 $ 228,674 $ 121,000 $ 119,523 $ 112,931 $ 76,938
Securities purchased under
agreements to resell and federal
funds sold........................ 411,529 474,483 349,209 674,249 471,052 358,710
Securities and other investments.... 124,373 91,350 77,809 65,693 117,094 115,126
Mortgage-backed securities, net..... 1,168,958 932,058 1,569,705 1,657,908 2,398,263 2,828,903
Loans, net
Single family-held for
investment.................... 4,978,688 4,686,600 5,795,179 6,113,318 7,000,303 4,144,787
Single family-held for sale..... 1,571,433 2,149,009 697,410 256,656 406,563 253,310
Commercial...................... 4,480,710 3,472,579 2,201,880 981,001 735,876 546,794
Consumer........................ 576,777 495,556 300,760 168,513 117,498 101,283
Mortgage servicing rights........... 431,746 410,868 272,214 123,392 75,097 56,677
Other assets........................ 893,301 723,815 581,906 552,124 548,857 427,633
------------ ---------- ---------- ---------- ---------- ---------
Total assets.................... $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============ ========== ========== ========== ========== =========
<CAPTION>
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
Deposits............................ $6,605,548 $6,320,476 $5,247,668 $5,147,945 $5,182,220 $4,764,204
Federal Home Loan Bank advances..... 5,744,594 4,783,294 3,992,344 3,490,386 4,383,895 2,620,329
Securities sold under agreements to
repurchase and federal fund
purchased......................... 576,007 811,742 1,308,600 832,286 1,172,533 553,000
Notes payable....................... 368,715 219,720 220,199 115,000 115,000 115,000
Other liabilities................... 671,426 659,848 414,282 410,217 448,283 320,766
------------ ---------- ---------- ---------- ---------- ---------
Total liabilities............... 13,966,290 12,795,080 11,183,093 9,995,834 11,301,931 8,373,299
------------ ---------- ---------- ---------- ---------- ---------
Minority interest-Bank preferred
stock............................. 185,500 185,500 185,500 185,500 185,500 85,500
Stockholders' equity................ 722,976 684,412 598,479 531,043 496,103 451,362
------------ ---------- ---------- ---------- ---------- ---------
Total liabilities, minority
interest and stockholders'
equity........................ $14,874,766 $13,664,992 $11,967,072 $10,712,377 $11,983,534 $8,910,161
============ ========== ========== ========== ========== =========
</TABLE>
S-7
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
-------------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Interest income...................... $ 478,775 $ 442,581 $ 898,746 $ 810,708 $ 812,312 $ 746,759 $ 494,706
Interest expense..................... 319,172 303,179 612,665 546,064 584,778 552,760 320,924
--------- --------- --------- --------- --------- --------- ---------
Net interest income................ 159,603 139,402 286,081 264,644 227,534 193,999 173,782
Provisions for credit losses......... 12,384 14,963 20,123 18,107 16,469 24,293 6,997
--------- --------- --------- --------- --------- --------- ---------
Net interest income after
provision for credit losses.... 147,219 124,439 265,958 246,537 211,065 169,706 166,785
Non-interest income
Net gains (losses)
Sales of single family servicing
rights and single family
loans.......................... 13,175 2,541 11,124 21,182 43,074 60,495 63,286
Securities and mortgage-backed
securities..................... 785 1,801 2,761 2,841 4,002 26 10,404
Other loans...................... 1,027 376 651 1,128 3,189 (1,210) 163
Sale of mortgage offices......... -- -- -- 4,748 -- -- --
Loan servicing, net of related
amortization..................... 27,598 13,459 35,975 32,381 30,383 32,677 26,813
Other.............................. 18,711 13,280 30,426 21,152 15,541 12,162 13,295
--------- --------- --------- --------- --------- --------- ---------
Total non-interest income.......... 61,296 31,457 80,937 83,432 96,189 104,150 113,961
--------- --------- --------- --------- --------- --------- ---------
Non-interest expense
Compensation and benefits.......... 47,125 39,625 86,725 75,016 87,640 83,520 86,504
SAIF deposit insurance premiums.... 2,010 1,927 4,160 4,797 45,690 11,428 11,329
Court of Claims litigation......... 4,077 900 1,800 -- -- -- --
Restructuring charges.............. -- -- -- -- 10,681 -- --
Other.............................. 56,326 45,795 95,857 92,323 95,407 88,797 96,832
--------- --------- --------- --------- --------- --------- ---------
Total non-interest expense......... 109,538 88,247 188,542 172,136 239,418 183,745 194,665
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes,
minority interest, and
extraordinary loss............... 98,977 67,649 158,353 157,833 67,836 90,111 86,081
Income tax expense (benefit)......... 37,365 (8,209) 25,722 60,686 (75,765) 37,415 (31,899)
--------- --------- --------- --------- --------- --------- ---------
Income before minority interest and
extraordinary loss............... 61,612 75,858 132,631 97,147 143,601 52,696 117,980
Minority interest
Bank preferred stock dividends..... 9,126 9,126 18,253 18,253 18,253 10,600 8,653
Payments in lieu of dividends...... -- -- -- -- 6,413 377 357
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary loss... 52,486 66,732 114,378 78,894 118,935 41,719 108,970
Extraordinary loss -- early
extinguishment of debt............. -- -- -- 2,323 -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income......................... $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 118,935 $ 41,719 $ 108,970
========= ========= ========= ========= ========= ========= =========
Net income applicable to diluted
earnings per common share........ $ 52,486 $ 66,732 $ 114,378 $ 76,571 $ 113,327 $ 38,824 $ 102,519
========= ========= ========= ========= ========= ========= =========
Earnings per common share
Basic.............................. $ 1.66 $ 2.11 $ 3.62 $ 2.42 $ 4.06 $ 1.45 $ 13.78
Diluted............................ 1.63 2.06 3.54 2.40 3.87 1.35 3.55
CERTAIN RATIOS AND OTHER DATA
Book value per common share.......... $ 22.91 $ 20.67 $ 21.67 $ 18.94 $ 16.81 $ 17.19 $ 15.64
Dividends per common share........... 0.32 0.32 0.64 0.56 3.16 -- --
Average common shares outstanding.... 31,565 31,596 31,595 31,596 29,260 28,863 28,863
Average common shares and potential
dilutive common
shares............................. 32,172 32,316 32,337 31,881 29,287 28,863 28,863
</TABLE>
S-8
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CERTAIN RATIOS AND OTHER
DATA -- CONTINUED
Regulatory capital ratios of Bank
United Tangible capital.......... 6.73% 7.02% 6.75% 7.72% 6.57% 6.20% 6.01%
Core capital....................... 6.75% 7.06% 6.77% 7.77% 6.64% 6.29% 6.17%
Total risk-based capital........... 11.92% 11.59% 10.48% 13.18% 13.09% 13.45% 14.02%
Return on average assets............. 0.86% 1.23% 1.04% 0.85% 1.28% 0.50% 1.42%
Return on average common equity...... 14.91% 21.68% 17.78% 13.50% 23.06% 8.80% 26.32%
Stockholders' equity to assets....... 4.86% 4.98% 5.01% 5.00% 4.96% 4.14% 5.07%
Tangible stockholders' equity to
tangible assets.................... 4.30% 4.52% 4.59% 4.89% 4.81% 3.93% 4.68%
Net yield on interest-earning
assets........................... 2.41% 2.42% 2.42% 2.52% 2.10% 1.92% 2.20%
Interest rate spread................. 2.23% 2.20% 2.21% 2.26% 1.78% 1.61% 1.95%
Average interest-earning assets to
average interest-bearing
liabilities........................ 1.03 1.04 1.04 1.05 1.06 1.06 1.06
Single family servicing portfolio.... $27,303,981 $23,887,887 $27,935,300 $24,518,396 $13,246,848 $12,532,472 $8,920,760
Fundings:
Single family...................... 2,399,057 1,959,019 3,789,389 2,188,273 3,602,009 3,226,324 5,424,550
Commercial......................... 2,040,570 1,219,141 2,876,328 1,492,931 891,306 547,117 364,604
Consumer........................... 142,620 180,030 367,097 152,665 125,596 99,249 94,153
---------- ---------- ---------- ---------- ---------- ---------- ---------
Total fundings....................... 4,582,247 3,358,190 7,032,814 3,833,869 4,618,911 3,872,690 5,883,307
---------- ---------- ---------- ---------- ---------- ---------- ---------
Loans purchased for held to maturity
portfolio.......................... 1,021,884 183,509 1,158,270 1,086,249 148,510 2,658,093 1,406,275
Non-interest expense to average total
assets............................. 1.53% 1.43% 1.48% 1.55% 2.13% 1.76% 2.35%
Net operating expense ratio.......... 0.67 0.92 0.84 0.80 1.28 0.76 0.97
Efficiency ratio..................... 48.36 50.39 49.88 49.20 72.23 58.26 63.36
Nonperforming assets to total
assets............................. 0.62 0.63 0.59 0.63 1.12 0.84 1.09
Net nonaccrual loans to total
loans.............................. 0.54 0.62 0.57 0.60 1.19 0.91 1.51
Allowance for credit losses to net
nonaccrual loans................... 93.34 71.44 75.91 72.61 44.24 48.74 30.73
Allowance for credit losses to
nonperforming assets............... 64.06 54.76 57.84 52.24 32.95 36.65 24.18
Allowance for credit losses to total
loans.............................. 0.50 0.44 0.44 0.43 0.52 0.44 0.46
Net loan charge-offs to average
loans.............................. 0.06 0.20 0.13 0.23 0.17 0.16 0.30
Full-time equivalent employees....... 2,234 1,689 1,927 1,541 2,310 2,663 2,894
Number of community banking
branches........................... 94 80 84 71 70 65 62
Number of commercial banking
origination offices................ 19 15 19 11 9 9 5
Number of mortgage origination
offices............................ 9 6 8 6 85 122 145
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED SEPTEMBER 30,
---------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CERTAIN RATIOS AND OTHER
DATA-EXCLUDING ADJUSTING ITEM
Net income........................... $ 55,036 $ 42,298 $ 89,944 $ 75,970 $ 56,392 $ 41,719 $ 50,804
Net income applicable to diluted
earnings per common shares......... 55,036 42,298 89,944 75,970 53,295 38,824 47,585
Earnings per diluted share........... 1.71 1.31 2.78 2.38 1.82 1.35 1.65
Return on average assets............. 0.89% 0.83% 0.85% 0.85% 0.67% 0.50% 0.72%
Return on average common equity...... 15.61 13.82 14.28 13.41 11.47 8.80 12.27
Efficiency ratio..................... 46.52 48.48 48.98 49.20 55.80 58.26 63.36
</TABLE>
S-9
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by us from the sale of the preferred stock,
after deducting the underwriting discounts and estimated fees and expenses, will
be approximately $ million, or approximately $ million if the
underwriter's over-allotment option is exercised in full. See "Underwriting"
starting on page S-15. We intend to use the net proceeds for general corporate
purposes.
CAPITALIZATION
The following table shows the capitalization of Bank United as of March 31,
1999 and as adjusted to reflect (1) the issuance of the shares of preferred
stock offered hereby and (2) the concurrent offering of the Corporate PIES. In
addition to the long-term debt of Bank United reflected below at March 31, 1999,
our bank subsidiary had long-term borrowings consisting of deposits, FHLB
advances, and certain other funding liabilities incurred in the ordinary course
of business.
<TABLE>
<CAPTION>
AT MARCH 31, 1999
-----------------------------
HISTORICAL AS ADJUSTED
----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt(1).................... $ 368,715 $ 368,715
Redeemable preferred stock........... -- 200,000
Minority Interest -- Preferred Stock
of the bank subsidiary(2).......... 185,500 185,500
Stockholders' equity:
Preferred stock(3).............. -- --
Common stock.................... 316 316
Paid-in capital................. 129,343 126,643
Retained earnings............... 599,088 599,088
Accumulated other comprehensive
income -- unrealized gains
(losses) on securities
available for sale, net of
tax........................... (4,708) (4,708)
Treasury stock, at cost......... (1,063) (1,063)
----------- ------------
Total stockholders' equity...... 722,976 720,276
----------- ------------
Total consolidated
capitalization..... $ 1,277,191 $ 1,474,491
=========== ============
Ratio of equity to assets............ 4.86% 4.84%
Ratio of tangible equity to tangible
assets............................. 4.30% 4.28%
Total shares of common stock
outstanding........................ 31,562,896 31,562,896
Book value per common share.......... 22.91 22.82
Tangible book value per share........ 20.15 20.06
</TABLE>
- ------------
(1) Excludes FHLB advances with maturities greater than one year of $2,330,345
at March 31, 1999 and as adjusted.
(2) Minority interest consists of $185.5 million stated value of the preferred
stock of the bank subsidiary.
(3) Bank United had 10,000,000 shares of preferred stock authorized, none of
which were issued as of March 31, 1999.
S-10
<PAGE>
DESCRIPTION OF THE PREFERRED STOCK
THE FOLLOWING SECTION DESCRIBES CERTAIN TERMS OF THE PREFERRED STOCK. IT
SUPPLEMENTS THE DESCRIPTION OF THE PREFERRED STOCK IN THE ACCOMPANYING
PROSPECTUS AND, TO THE EXTENT INCONSISTENT WITH THE PROSPECTUS, REPLACES THE
DESCRIPTION IN THE PROSPECTUS. THE FOLLOWING DESCRIPTION CONTAINS A DESCRIPTION
OF ALL MATERIAL TERMS OF THE PREFERRED STOCK, BUT DOES NOT PURPORT TO BE
COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
CERTIFICATE OF DESIGNATIONS RELATING TO THE PREFERRED STOCK. A FORM OF THE
CERTIFICATE OF DESIGNATIONS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE A PART.
GENERAL
The preferred stock will rank senior to our common stock with respect to
the payment of dividends and upon liquidation, dissolution or winding up of Bank
United.
The preferred stock will not be convertible into shares of common stock or
any other class or series of our capital stock and will not be subject to any
sinking fund or other obligation for its repurchase or retirement.
The registrar, transfer agent and disbursing agent for the preferred stock
is The Bank of New York.
DIVIDENDS
Holders of shares of the preferred stock will be entitled to receive, when
and as declared by our board of directors out of assets of Bank United legally
available for payment, cash dividends at the annual rate of % through the
dividend payment date on February , 2000 and thereafter at the annual rate of
%. Dividends on the preferred stock will be payable quarterly on February
, May , August and November of each year, commencing November , 1999,
at such annual rates.
Each such dividend will be payable to the holders of record as they appear
on the stock register on such record dates, not exceeding 45 days preceding the
relevant payment date, as shall be fixed by our board of directors. Dividends
will be cumulative from the date of issue. Dividends payable on the preferred
stock for any period greater or less than a full dividend period shall be
computed on the basis of twelve 30-day months, a 360-day year and the actual
number of days elapsed in the period. Dividends payable on the preferred stock
for each full dividend period shall be computed by annualizing the dividend rate
and dividing by four. The initial dividend on the preferred stock, which will be
for the period from August , 1999 to November , 1999, will be approximately
$ per share of preferred stock and will be payable on November , 1999.
Through a subsidiary, we own all the outstanding common stock of our bank
subsidiary. As a holding company without significant assets other than our
indirect ownership of all the common stock of our bank subsidiary, our ability
to meet our cash obligations, including debt service, is dependent upon the
payment of dividends by our bank subsidiary on its common stock. The declaration
of dividends by the bank subsidiary is subject to the discretion of the board of
directors of the bank subsidiary, the terms of the outstanding preferred stock
of the bank subsidiary and applicable regulatory requirements. While it is the
present intention of the board of directors of the bank subsidiary to declare
dividends in an amount sufficient to provide us with the cash flow necessary to
meet our obligations, including dividends and mandatory redemption payments on
the preferred stock, we cannot assure you that circumstances which would limit
or preclude the declaration of dividends by the bank subsidiary on its common
stock will not exist in the future.
ADDITIONAL AMOUNTS
In the unlikely event that any distributions on the preferred stock with
respect to any fiscal year are not eligible for the dividends-received deduction
under the Internal Revenue Code of 1986, as amended, solely because the
preferred stock is treated as indebtedness pursuant to a final
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determination within the meaning of Section 1313(a) of the Internal Revenue Code
to which we or any U.S. corporate holder are parties ("Applicable
Distributions"), we will, within 45 days after our receipt of the
determination, provide notice thereof to the transfer agent. The transfer agent
will mail a copy of such notice to each U.S. corporate investor who received an
Applicable Distribution during such fiscal year at the address specified in the
records of the transfer agent as promptly as practicable after its receipt of
such notice from us. We will, within 15 days after such notice is given to the
transfer agent, pay to the transfer agent, out of funds legally available for
such payment, an amount equal to the aggregate Additional Amounts (as defined
below) with respect to all Applicable Distributions during such fiscal year.
Upon receipt of the aggregate Additional Amounts, the transfer agent will
distribute to each investor that certifies to the transfer agent, on a form
provided for that purpose, that it is (or was) otherwise qualified to receive
the dividends-received deduction under all relevant sections of the Internal
Revenue Code, the Additional Amount to which that investor is entitled with
respect to each Applicable Distribution received by the investor during the
fiscal year. Any portion of the aggregate Additional Amounts not distributed by
the transfer agent will be returned to us within 90 days of the transfer agent's
receipt of those amounts.
"Additional Amount(s)" means payment with respect to an Applicable
Distribution of an amount which, when taken together with such Applicable
Distribution, would cause the net yield in dollars, after federal income tax
consequences, from the aggregate of both the Applicable Distributions and the
Additional Amount, to be equal to the net yield in dollars after federal income
tax consequences that would have been realized by the investor if the amount of
the aggregate Applicable Distributions had been treated as a dividend, giving
effect to the dividends-received deduction, for federal income tax purposes. The
Additional Amount will be calculated with consideration given to the time value
of money, applying the corporate underpayment rate as defined in Section
6621(a)(2) of the Internal Revenue Code as the interest factor, assuming the
Additional Amount is subject to tax as ordinary income, and using the maximum
marginal corporate federal tax rate applicable to ordinary income.
REDEMPTION
Shares of the preferred stock will not be redeemable prior to February ,
2000. On or after such date, the shares of preferred stock will be redeemable at
our option, in whole or in part, at any time or from time to time on not less
than 30 or more than 60 days notice by mail, at a redemption price equal to 100%
of the liquidation preference, plus accrued and upaid dividends to the date of
redemption.
We will be required to redeem the preferred stock, in whole and not in
part, on August , 2004, at a redemption price equal to 100% of its liquidation
preference plus accrued and unpaid dividends to the date of redemption.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Bank United, the holders of the preferred stock at the time
outstanding will be entitled to receive out of the assets of Bank United
available for distribution to stockholders, before any distribution of assets is
made to the holders of common stock or any other class of stock ranking junior
to the preferred stock upon liquidation, dissolution or winding up, liquidating
distributions in the amount of $50 per share, plus an amount equal to accrued
and unpaid dividends for the then-current dividend period and all dividend
periods prior thereto.
VOTING RIGHTS
Each share of preferred stock will have the right to vote in connection
with matters submitted generally to the holders of the common stock of Bank
United, voting together as a single class with shares of the common stock and
other capital stock of Bank United entitled to vote in respect of matters
submitted to stockholders generally. Each share of preferred stock will have
0.10 vote for this purpose. Based on the number of shares of common stock of
Bank United outstanding as of the date
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of this prospectus supplement and assuming that all shares offered hereby are
issued and outstanding, the shares of preferred stock would represent, in the
aggregate, approximately % of the combined voting power of the shares of
preferred stock and the common stock.
Whenever dividends on shares of the preferred stock have not been paid in
an aggregate amount equal to at least six quarterly dividends on those shares,
whether or not consecutive, the holders of the preferred stock, voting
separately as a class with the holders of any stock ranking equally as to
dividends with the preferred stock on which similar voting rights have been
conferred and are exercisable, will be entitled to elect two directors to our
board of directors either by written consent or at an annual or special meeting
of our stockholders held during the period those dividends remain in arrears.
These voting rights will terminate when all those dividends accrued and in
default have been paid in full or declared and funds for their payment in full
have been set apart. At that time, the term of office of all directors so
elected will also terminate.
In addition, the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of preferred stock, voting as a separate
class, will be required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any provisions of our certificate of
incorporation that adversely affect the powers, preferences, privileges or
rights of the holders of the preferred stock. The affirmative vote or consent of
the holders of shares representing at least two-thirds of the combined voting
power of the preferred stock and any other series of preferred stock of Bank
United ranking on a parity with the preferred stock as to dividends or upon
liquidation, voting as a single class without regard to series, will be required
to authorize or effect (1) the creation, authorization or issuance of, (2) the
reclassification of any authorized stock of Bank United into or (3) the
creation, authorization or issuance of any obligation or security convertible
into or evidencing the right to purchase, any additional class or series of
stock ranking prior to the preferred stock as to dividends or upon liquidation,
dissolution or winding up of Bank United.
Except as described above in this section on voting rights, as described in
the accompanying prospectus or as required by law, the preferred stock will have
no other voting rights.
BOOK-ENTRY ISSUANCE
The preferred stock will be issued as one or more global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
The depositary for the preferred stock will be DTC. The preferred stock will be
issued in accordance with the procedures described under "Book-Entry Procedures
and Settlement" below.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Upon issuance, all book-entry securities will be represented by one or more
fully registered global securities, without coupons. Each global security will
be deposited with, or on behalf of, DTC, a securities depository, and will be
registered in the name of DTC or a nominee of DTC. DTC will thus be the only
registered holder of these securities.
Purchasers of securities may only hold interests in the global notes
through DTC if they are participants in the DTC system. Purchasers may also hold
interests through a securities intermediary -- banks, brokerage houses and other
institutions that maintain securities accounts for customers -- that has an
account with DTC or its nominee. DTC will maintain accounts showing the security
holdings of its participants, and these participants will in turn maintain
accounts showing the security holdings of their customers. Some of these
customers may themselves be securities intermediaries holding securities for
their customers. Thus, each beneficial owner of a book-entry security will hold
that security indirectly through a hierarchy of intermediaries, with DTC at the
"top" and the beneficial owner's own securities intermediary at the
"bottom."
The securities of each beneficial owner of a book-entry security will be
evidenced solely by entries on the books of the beneficial owner's securities
intermediary. The actual purchaser of the securities will generally not be
entitled to have the securities represented by the global securities
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<PAGE>
registered in its name and will not be considered the owner under Bank United's
charter or bylaws. In most cases, a beneficial owner will also not be able to
obtain a paper certificate evidencing the holder's ownership of securities. The
book-entry system for holding securities eliminates the need for physical
movement of certificates and is the system through which most publicly traded
stock is held in the United States. However, the laws of some jurisdictions
require some purchasers of securities to take physical delivery of their
securities in definitive form. These laws may impair the ability of a beneficial
owner to transfer book-entry securities.
A beneficial owner of book-entry securities represented by a global
security may exchange the securities for definitive (paper) securities only if:
o DTC is unwilling or unable to continue as depositary for such global
security and Bank United does not appoint a qualified replacement for
DTC within 90 days; or
o Bank United in its sole discretion decides to allow some or all
book-entry securities to be exchangeable for definitive securities in
registered form.
Any global security that is so exchanged will be exchanged in whole for
definitive securities in registered form, with the same terms and of an equal
aggregate liquidation preference. Definitive securities will be registered in
the name or names of the person or persons specified by DTC in a written
instruction to the registrar of the securities. DTC may base its written
instruction upon directions that it receives from its participants.
In this prospectus supplement and the related prospectus, references to
actions taken by security holders will mean actions taken by DTC upon
instructions from its participants, and references to payments and notices of
redemption to security holders will mean payments and notices of redemption to
DTC as the registered holder of the securities for distribution to participants
in accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Securities Exchange Act
of 1934. The rules applicable to DTC and its participants are on file with the
SEC.
DTC's management is aware that some computer applications, systems, and the
like for processing dates that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, as they relate to the timely payment of distributions to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which is expected to be completed within appropriate
time frames.
Bank United will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in the book-entry securities or for maintaining, supervising or
reviewing any records relating to beneficial ownership interests.
DTC may discontinue providing its services as securities depositary at any
time by giving reasonable notice. Under such circumstances, in the event that a
successor securities depositary is not appointed, securities certificates are
required to be printed and delivered. Additionally, Bank United may decide to
discontinue use of the system of book-entry transfers through DTC or any
successor depositary with respect to the preferred securities. In that event,
certificates for the securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Bank United believes to be reliable, but
Bank United does not take responsibility for the accuracy thereof.
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<PAGE>
UNDERWRITING
We have entered into an underwriting agreement with Lehman Brothers,
pursuant to which, and subject to its terms and conditions, we have agreed to
sell to Lehman Brothers and Lehman Brothers has agreed to purchase from us all
the offered shares of preferred stock.
The underwriting agreement provides that the obligation of Lehman Brothers
to purchase the preferred stock is subject to the satisfaction of certain
conditions, including the approval of certain legal matters by its counsel.
Subject to the terms and conditions of the underwriting agreement, Lehman
Brothers must purchase all of the shares of preferred stock offered hereby if it
purchases any of them.
Lehman Brothers has advised us that it will offer the preferred stock
directly to the public initially at the offering price and to certain dealers at
the offering price shown on the cover page of this prospectus supplement less a
selling concession not to exceed $ per share of preferred stock. Lehman
Brothers may allow and these dealers may reallow a concession not to exceed
$ per share of preferred stock to other dealers. After the initial offering
of the preferred stock, Lehman Brothers may change the public offering price,
the concession to selected dealers and the reallowance to other dealers.
The following table shows the underwriting discount that we will pay to
Lehman Brothers in connection with this offering. The amounts below represent
the underwriting discount assuming both exercise and no exercise of the option
of Lehman Brothers to purchase an additional shares of preferred stock to
cover over-allotments.
<TABLE>
<CAPTION>
WITHOUT OVER-ALLOTMENT WITH OVER-ALLOTMENT
---------------------- -------------------
<S> <C> <C>
Per Share of Preferred Stock............ $ $
Total................................... $ $
</TABLE>
We estimate that our expenses in connection with the offering of the
preferred stock will be approximately $ .
We have granted to Lehman Brothers an option to purchase an aggregate of up
to an additional shares of preferred stock solely to cover
over-allotments, at the initial offering price to the public. Any or all of the
option may be exercised at any time on or before 30 days after the date of the
underwriting agreement. To the extent that the option is exercised, Lehman
Brothers will be committed, subject to certain conditions, to purchase up to
that number of additional shares of preferred stock.
We have agreed to indemnify Lehman Brothers against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
which Lehman Brothers would be required to make regarding any liabilities that
it may have under the Securities Act.
There is no established trading market for the preferred stock. The
preferred stock will not be listed on any securities exchange or quoted on any
quotation system. Lehman Brothers has advised us that it presently intends to
make a market in the preferred stock as permitted by applicable laws and
regulations. Lehman Brothers is not obligated to make a market in the preferred
stock, however, and it may discontinue this market making at any time in its
sole discretion. Accordingly, we cannot assure investors that there will be
adequate liquidity or adequate trading markets for the preferred stock.
In connection with the offering of the preferred stock, Lehman Brothers may
engage in certain transactions that stabilize the price of the preferred stock.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the preferred stock. If Lehman Brothers
creates a short position in the preferred stock in connection with this
offering, by selling more shares of preferred stock than are listed on the cover
page of this prospectus supplement, then Lehman Brothers may reduce that short
position by purchasing preferred stock in the open market. In general, the
purchase of a security for the purpose of stabilization or reducing a short
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<PAGE>
position could cause the price of that security to be higher than it might
otherwise be in the absence of those purchases.
Neither we nor Lehman Brothers makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the preferred stock. In addition, neither we nor Lehman
Brothers makes any representation that anyone will engage in these transactions
or that these transactions, once they have begun, will not be discontinued
without notice.
Lehman Brothers has, directly and indirectly, provided investment and
commercial banking or financial advisory services to us and our affiliates, for
which it has received customary fees and commissions, and expects to provide
these services to us and our affiliates in the future, for which it expects to
receive customary fees and commissions.
Certain wholly owned subsidiaries of Lehman Brothers Inc. own an aggregate
of 1,529,557 shares of common stock of Bank United, which represents 5.4% of the
outstanding common stock.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary of certain of the United States federal income tax
consequences of the ownership of the preferred stock is for discussion purposes
only. It is based upon laws, regulations, rulings and decisions in effect, all
of which are subject to changes in application or interpretation that could
apply retroactively, resulting in U.S. federal income tax consequences different
from those discussed below. This summary deals only with preferred stock held as
capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, tax-exempt
entities, regulated investment companies, dealers in securities or currencies,
non-resident alien individuals, foreign corporations, foreign partnerships or
foreign estates or trusts, persons holding preferred stock as a hedge against
currency risk or as a position in a "straddle" for tax purposes, persons whose
functional currency is not the United States dollar, or persons subject to the
alternative minimum tax. This summary also does not address holders other than
original purchasers or the consequences of any laws other than those pertaining
to the U.S. federal income tax. Persons considering purchasing the preferred
stock should consult their own tax advisors concerning the application of United
States federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership, and disposition of the preferred stock
under the laws of any other taxing jurisdiction.
We expect all distributions declared and paid by us on shares of preferred
stock:
o to be treated as dividends for federal income tax purposes to the
extent paid out of our current or accumulated earnings and profits, as
determined for federal income tax purposes, and
o to be eligible for the 70% dividends received deduction allowed to
qualifying U.S. corporate shareholders.
We expect to have sufficient earnings and profits to enable all
distributions on the preferred stock to qualify as dividends for federal income
tax purposes. We cannot assure prospective holders that we will have sufficient
current earnings and profits for all distributions on the preferred stock,
however, as our expectation is based in part on assumptions as to various
factors that are beyond our control. Although we expect that the preferred stock
will be treated as preferred stock for U.S. federal income tax purposes, it is
possible that it could be treated as indebtedness. In the unlikely event that it
were so treated, with the effect that recipients of distributions from us were
not eligible to receive the dividends-received deduction, an Additional Amount
would be payable by us in accordance with "Description of the Preferred
Stock -- Additional Amounts" above, and the tax consequences of income received
on the preferred stock could differ from those described in this section.
Prospective investors in shares of the preferred stock should consider the
effect of section 246A of the Internal Revenue Code, which reduces the
dividends-received deduction allowed to a corporate
S-16
<PAGE>
shareholder that has incurred indebtedness that is "directly attributable" to
an investment in portfolio stock. Prospective investors should also consider the
effect of section 246(c) of the Internal Revenue Code, which among other things,
disallows the dividends-received deduction in respect of any dividend on a share
of stock that has been held for 45 days or less during the 90-day period
beginning on the date that is 45 days before the date on which such share
becomes ex-dividend with respect to such dividend. Any period will not be
counted toward the 45-day holding period if during that period the holder has an
option to sell, is under a contractual obligation to sell, has made (and not
closed) a short sale of, or has granted certain options to buy, substantially
identical stock or securities, or holds one or more other positions in
substantially similar or related property that diminish the risk of loss from
holding preferred stock. Prospective investors should also consider the effect
of section 1059 of the Internal Revenue Code, which reduces a shareholder's
basis in stock upon the receipt of an extraordinary dividend and in certain
other circumstances that could apply if we failed to pay dividends currently on
the preferred stock or the preferred stock were considered to have been issued
with an issue price in excess of its liquidation rights or stated redemption
price, which we believe is not the case.
In the past, legislation has been proposed that would have reduced the
dividends received deduction applicable to certain preferred stock. There can be
no assurance that similar legislation will not be enacted in the future or that
other legislation will not be enacted that would reduce the dividends-received
deduction available to corporate holders of the preferred stock.
Because the availability of the dividends-received deduction may be
affected by the particular circumstances of each U.S. corporate holder of the
stock, prospective U.S. corporate investors are encouraged to consult their tax
advisors.
LEGAL MATTERS
The validity of the preferred stock which is being offered will be passed
upon for us by Wachtell, Lipton, Rosen & Katz, New York, New York. Certain legal
matters will be passed upon for Lehman Brothers by Simpson Thacher & Bartlett,
New York, New York.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus supplement by reference from Bank United Corp.'s
Annual Report on Form 10-K for the year ended September 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this prospectus supplement, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated in this
prospectus supplement by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their report included in Bank United Corp.'s
Quarterly Report on Form 10-Q they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
for their reports on the unaudited interim financial information because those
reports are not "reports" or a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
S-17
<PAGE>
================================================================================
2,000,000 SHARES
SERIES A PREFERRED STOCK
BANK UNITED CORP.
---------------------------
PROSPECTUS SUPPLEMENT
, 1999
---------------------------
LEHMAN BROTHERS
================================================================================
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE, AND IT MAY CHANGE. THIS
PROSPECTUS IS INCLUDED IN A REGISTRATION STATEMENT THAT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER WE NOR THE SELLING STOCKHOLDERS CAN
SELL THESE SECURITIES UNTIL THAT REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR THE SOLICITATION OF AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 27, 1999
PROSPECTUS
BANK
UNITED CORP.
----------------------------------------------
BANK UNITED CAPITAL TRUST
----------------------------------------------
$830,000,000
PREFERRED STOCK
CLASS A COMMON STOCK
DEPOSITARY SHARES
JUNIOR SUBORDINATED DEBT SECURITIES
GUARANTEE
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
of Bank United Corp.
TRUST PREFERRED SECURITIES
of Bank United Capital Trust
INVESTING IN THE OFFERED SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 1.
Our Class A common stock is traded on the Nasdaq under the symbol "BNKU". On
July 26, 1999, the last reported sale price of our Class A common stock on the
Nasdaq was $37.00 per share. We urge prospective purchasers of the Class A
common stock to obtain current information as to market prices of the Class A
common stock.
We may use this prospectus to sell Class A common stock, preferred stock,
depositary shares, junior subordinated debt securities, guarantees, stock
purchase contracts or stock purchase units. We may also use this prospectus for
Bank United Capital Trust to sell trust preferred securities or for selling
stockholders to sell Class A common stock.
WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO
THIS PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENTS
CAREFULLY BEFORE YOU INVEST.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
THESE SECURITIES ARE NOT OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------------------------
JULY , 1999
<PAGE>
TABLE OF CONTENTS
PAGE
----
Risk Factors ............................................................ 1
Use of Proceeds ......................................................... 4
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges
and Preferred Dividends ............................................... 4
Bank United Corp. ....................................................... 5
Bank United Capital Trust ............................................... 6
Description of Offered Securities ....................................... 8
Relationship Among the Trust Preferred Securities, the Trust Preferred
Securities Guarantee and the Junior Subordinated Notes Held by Bank
United Capital Trust .................................................. 33
Selling Stockholders .................................................... 34
Plan of Distribution .................................................... 35
Legal Matters ........................................................... 36
Experts ................................................................. 36
Forward-Looking Information ............................................. 36
About this Prospectus ................................................... 37
Where You Can Find More Information ..................................... 38
<PAGE>
RISK FACTORS
An investment in any of the securities offered by this prospectus involves
certain risks. Before you decide to purchase any of these securities, you should
carefully consider the following risk factors, in addition to the other
information included in this prospectus and the applicable prospectus
supplement, before making an investment decision.
HOLDERS OF SHARES OF OUR COMMON STOCK COULD EXPERIENCE DILUTION.
We issued 31,595,596 shares in our IPO in August 1996. Since that time, we
have repurchased 34,200 shares and issued 142,250 shares, so that we currently
have 31,703,646 shares of common stock outstanding. Of the 31,595,596 shares
issued in our IPO, 12,075,000 were registered under the Securities Act of 1933
and sold to the public in the IPO, and 19,520,596 were subject to contractual
restrictions on sale which expired or expire at various times. We agreed to use
our best efforts to register these 19,520,596 shares under the Securities Act
and to maintain the effectiveness of these registrations for a specified period.
The restrictions on 11,314,818 shares expired prior to March 31, 1999, and the
contractual restrictions on the sale of 7,887,436 of the remaining 8,205,778
shares were terminated on June 4, 1999 and the restrictions on the remaining
318,342 shares will terminate on July 28, 1999.
OUR OBLIGATIONS UNDER THE TRUST PREFERRED SECURITIES GUARANTEE AND THE JUNIOR
SUBORDINATED DEBT SECURITIES ARE SUBORDINATED.
Our obligations under the trust preferred securities guarantee and under
the junior subordinated debt securities will rank junior in priority of payment
to all our senior indebtedness. This means that we cannot make any payments on
the trust preferred securities guarantee or the junior subordinated debt
securities if we default on a payment of senior indebtedness and do not cure the
default within the applicable grace period, or if the senior indebtedness
becomes immediately due because of a default and has not yet been paid in full.
In addition, our obligations under the trust preferred securities guarantee and
under the junior subordinated debt securities will rank junior to all existing
and future liabilities of our subsidiaries.
We cannot make any payments on the trust preferred securities guarantee if
we default on a payment on any of our other debt. In addition, in the event of
our bankruptcy, liquidation or dissolution, our assets would be available to pay
obligations under the trust preferred securities guarantee only after we have
made all payments on our other liabilities.
Neither the trust preferred securities of Bank United Capital Trust, our
junior subordinated debt securities nor our trust preferred securities guarantee
limit our ability or that of our subsidiaries to incur additional indebtedness,
including indebtedness that ranks senior in priority of payment to the junior
subordinated debt securities and the trust preferred securities guarantee.
BANK UNITED CAPITAL TRUST'S ABILITY TO MAKE PAYMENTS ON ITS TRUST PREFERRED
SECURITIES WILL DEPEND ENTIRELY ON OUR PAYMENTS ON OUR JUNIOR SUBORDINATED DEBT
SECURITIES.
The only assets of Bank United Capital Trust will be its investment in our
junior subordinated debt securities. Accordingly, the ability of Bank United
Capital Trust to pay scheduled distributions on its trust preferred securities,
as well as the redemption price and the liquidation amount of the trust
preferred securities, is solely dependent upon us paying, when due, the related
payments we are obligated to pay on the junior subordinated debt securities.
OUR OBLIGATIONS UNDER THE TRUST PREFERRED SECURITIES GUARANTEE ARE LIMITED.
The trust preferred securities guarantee only guarantees that we will make
distribution, redemption and liquidation payments on the trust preferred
securities of Bank United Capital Trust if it has the funds to do so itself but
does not. If we fail to pay in full principal or interest when due on our junior
subordinated debt securities, Bank United Capital Trust will not have sufficient
funds to make distribution, redemption or liquidation payments on the trust
preferred securities. In those
1
<PAGE>
circumstances, you also will not be able to rely upon the trust preferred
securities guarantee for payment of these amounts.
Instead, you:
o may directly sue us or seek other remedies to collect your
proportionate share of payments owed; or
o rely on the Property Trustee to enforce Bank United Capital
Trust's rights under the junior subordinated debt securities.
OUR DEFERRAL OF DISTRIBUTIONS ON THE JUNIOR SUBORDINATED DEBT SECURITIES WOULD
NOT RELIEVE YOU OF LIABILITY FOR TAXES AND COULD AFFECT THE TRADING PRICE OF THE
TRUST PREFERRED SECURITIES.
So long as no event of default under the junior subordinated debt
securities has occurred and is continuing, we can, on one or more occasions,
defer interest payments on the junior subordinated debt securities for the
number of consecutive periods specified in the applicable prospectus supplement.
If we defer interest payments on the junior subordinated debt securities, Bank
United Capital Trust will defer distributions on the trust preferred securities
during such deferral period. However, distributions will still accumulate and
such deferred distributions will themselves accrue interest to the extent
permitted by law.
If we defer payments of interest on the junior subordinated debt securities
held by Bank United Capital Trust, you will be required to recognize interest
income for U.S. federal income tax purposes based on your proportionate share of
the interest on those junior subordinated debt securities before you receive any
cash relating to such interest. In addition, you will not receive such cash from
the trust if you sell the trust preferred securities before the end of any
deferral period or before the record date relating to distributions that are
paid.
We have no current intention of deferring interest payments on the junior
subordinated debt securities and believe that deferral is a remote possibility.
However, if we exercise our right to defer in the future, the trust preferred
securities may trade at a price that does not fully reflect the value of accrued
but unpaid interest on the junior subordinated debt securities. If you sell the
trust preferred securities during an interest deferral period, you may not
receive the same return on your investment as someone who continues to hold the
trust preferred securities.
Even if we do not exercise our right to defer interest payments on the
junior subordinated debt securities, our right to do so may make the market
price for the trust preferred securities more volatile than that of other
securities without this feature.
The prospectus supplement with respect to the trust preferred securities
will describe relevant U.S. federal income tax considerations applicable to the
purchase, holding and disposition of the trust preferred securities.
WE MAY REDEEM YOUR TRUST PREFERRED SECURITIES AT ANY TIME IF SPECIFIED CHANGES
IN TAX, INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If any of the changes in tax, investment company or bank regulatory law
described in this prospectus occur and are continuing, and certain other
conditions are satisfied, we will have the right to redeem the junior
subordinated debt securities within 90 days of the event whether or not we could
otherwise have redeemed the junior subordinated debt securities at that time.
Any redemption will cause a mandatory redemption of trust preferred securities
having a total liquidation amount equal to the total principal amount of junior
subordinated debt securities to be redeemed. Prior to any such redemption, we
will obtain any required regulatory approvals. See "Description of the Offered
Securities -- Trust Preferred Securities -- Distribution of the Junior
Subordinated Debt Securities" and "-- Special Event Redemption."
2
<PAGE>
HOLDERS OF THE TRUST PREFERRED SECURITIES WILL HAVE LIMITED VOTING RIGHTS.
You will have very limited voting rights if you own or hold trust preferred
securities. Among other things, we will have the power to elect or remove any of
the trustees of Bank United Capital Trust unless an event of default under the
junior subordinated debt securities has occurred and is continuing. See "Trust
Preferred Securities -- Voting Rights; Amendment of Declaration."
WE MAY TERMINATE BANK UNITED CAPITAL TRUST AT ANY TIME.
Subject to obtaining any required regulatory approval, we have the right to
terminate Bank United Capital Trust at any time. If we decide to exercise our
right to terminate Bank United Capital Trust, Bank United Capital Trust will
redeem its trust securities by distributing the junior subordinated debt
securities to holders of the trust securities on a proportionate basis.
Under current U.S. federal income tax law, a distribution of junior
subordinated debt securities to you upon the dissolution of Bank United Capital
Trust should not be a taxable event to you. However, if Bank United Capital
Trust is characterized for U.S. federal income tax purposes as an association
taxable as a corporation at the time it is dissolved or if there is a change in
law, the distribution of junior subordinated debt securities to you may be a
taxable event to you.
We have no current intention of terminating Bank United Capital Trust and
distributing junior subordinated debt securities to the holders of its trust
preferred securities. We anticipate that we would consider exercising this right
in the event that expenses associated with maintaining Bank United Capital Trust
were substantially greater than currently expected, such as if certain changes
in tax, investment company or bank regulatory law occurred. We cannot predict
the other circumstances under which we would exercise this right.
THE TRUST PREFERRED SECURITIES ARE A NEW SECURITY WITH NO PRIOR MARKET.
Prior to this offering there has been no public market for the trust
preferred securities, and we cannot assure you that a market will develop. The
trust preferred securities may not be listed on any securities exchange. The
underwriters may make a market in the trust preferred securities after the
consummation of this offering, as permitted by applicable laws and regulations;
however, the underwriters are not obligated to do so, and may discontinue any
such market making activities at any time without notice. If a trading market
for the trust preferred securities does develop, the trust preferred securities
may trade at a discount from their initial offering price depending on
prevailing interest rates, the market for similar securities, our performance
and other factors.
THERE MAY BE NO TRADING MARKET FOR THE JUNIOR SUBORDINATED DEBT SECURITIES.
Although we will use our best efforts to list the junior subordinated debt
securities on the exchange, if any, on which the trust preferred securities are
then listed if they are distributed, we cannot assure you that the junior
subordinated debt securities will be approved for listing on that exchange or
that a trading market will exist for those securities.
3
<PAGE>
USE OF PROCEEDS
Unless we have indicated otherwise in the applicable prospectus supplement,
we expect to use the net proceeds we receive from any offering of these
securities for our general corporate purposes. Bank United Capital Trust will
use the net proceeds from the sale of its trust preferred securities to purchase
junior subordinated debt securities from us.
Neither we nor Bank United Capital Trust will receive any of the proceeds
from any sale of Class A common stock by any of the selling stockholders. See
"Selling Stockholders."
RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
Our ratios of earnings to fixed charges, which are computed on the basis of
the total enterprise (as defined by the Securities and Exchange Commission) by
dividing earnings before fixed charges and income taxes by fixed charges, are
shown below for the periods indicated. Also shown below are our ratios of
earnings to combined fixed charges and preferred stock dividends, which are
computed on the basis of the total enterprise by dividing earnings before fixed
charges and income taxes by fixed charges and preferred stock dividend
requirements, for the periods indicated. Fixed charges consist principally of
interest expense on all long- and short-term borrowings, excluding or including
interest on deposits as indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
-------------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS TO FIXED CHARGES:
Excluding interest expense on
deposits......................... 1.56 1.41 1.50 1.54 1.21 1.30 1.72
Including interest expense on
deposits......................... 1.31 1.22 1.26 1.29 1.11 1.16 1.26
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED DIVIDENDS:
Excluding interest expense on
deposits......................... 1.44 1.30 1.37 1.40 1.10 1.23 1.54
Including interest expense on
deposits......................... 1.25 1.17 1.20 1.22 1.06 1.13 1.21
</TABLE>
4
<PAGE>
BANK UNITED CORP.
We are a broad-based financial services provider to consumers and
businesses in Texas and selected regional markets throughout the United States.
At March 31, 1999, we operated a 94-branch community banking network serving
nearly 265,000 households, as well as 19 commercial banking offices in 16 states
across the country. As of March 31, 1999, we were the largest publicly traded
financial institution headquartered in Texas, with $14.9 billion in assets, $6.6
billion in deposits, and $723.0 million in stockholders' equity. Our address is
3200 Southwest Freeway, Suite 2600, Houston, Texas 77027 and our telephone
number is (713) 543-6500.
We were incorporated in Delaware on December 19, 1989 as USAT Holdings Inc.
and became the holding company for Bank United (the "Bank") upon its formation
on December 30, 1988. The Bank is a federally chartered savings bank, the
deposits of which are insured by the Savings Association Insurance Fund, which
is administered by the FDIC. In December 1996, we formed a wholly owned,
Delaware subsidiary, BNKU Holdings, Inc., which is now the direct parent company
of the Bank.
The Bank's capital levels at March 31, 1999 and September 30, 1998
qualified it as "well-capitalized," the highest of five categories under
applicable regulatory definitions. The Bank's capital ratios at March 31, 1999
and September 30, 1998, and the applicable regulatory capital requirements, were
as follows:
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30, CAPITAL ADEQUACY WELL-CAPITALIZED
1999 1998 REQUIREMENT REQUIREMENT
----------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Tangible capital..................... 6.73% 6.75% 1.50% --
Core/leverage capital................ 6.75% 6.77% 3.00% 5.00%
Tier 1 capital....................... 9.86% 9.97% -- 6.00%
Total risk-based capital............. 11.92% 10.48% 8.00% 10.00%
</TABLE>
5
<PAGE>
BANK UNITED CAPITAL TRUST
Bank United Capital Trust is a statutory business trust newly formed under
Delaware law by (1) a declaration of trust executed by us, as sponsor for the
trust, and by the trustees for the trust, and (2) the filing of a certificate of
trust with the Delaware Secretary of State. The declaration will be amended and
restated in its entirety substantially in the form filed as an exhibit to the
registration statement of which this prospectus forms a part, as of the date
securities of Bank United Capital Trust are initially issued. The amended
declaration will be qualified as an indenture under the Trust Indenture Act of
1939.
Bank United Capital Trust exists for the exclusive purposes of (1) issuing
two classes of trust securities, trust preferred securities and trust common
securities, which together represent undivided beneficial interests in the
assets of Bank United Capital Trust; (2) investing the gross proceeds of the
trust securities in our junior subordinated debt securities; and (3) engaging in
only those other activities necessary or incidental thereto.
We will directly or indirectly own all of the trust common securities. The
trust common securities will rank equally in right of payment, and payments will
be made thereon proportionately, with the trust preferred securities except that
upon the occurrence and during the continuance of an event of default under the
amended declaration, the rights of the holders of the trust common securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the trust
preferred securities. We will acquire, directly or indirectly, trust common
securities in a total liquidation amount equal to 3% of the total capital of
Bank United Capital Trust.
Bank United Capital Trust has a term of approximately 55 years, but may
terminate earlier as provided in its amended declaration. The business and
affairs of Bank United Capital Trust will be conducted by its trustees, who will
initially be appointed by us, as the direct or indirect holder of all the trust
common securities. We, as the direct or indirect holder of all of the trust
common securities of Bank United Capital Trust, will also be entitled to
appoint, remove or replace the Bank United Capital Trust trustees, unless an
event of default in respect of our junior subordinated debt securities held by
Bank United Capital Trust has occurred and is continuing.
The duties and obligations of the Bank United Capital Trust trustees will
be governed by the amended declaration. A majority of the Bank United Capital
Trust trustees (the "Regular Trustees") will be persons who are our employees,
officers, or affiliates.
One Bank United Capital Trust trustee will be a financial institution
unaffiliated with us that will act as property trustee and as indenture trustee
for purposes of the Trust Indenture Act, under the terms set forth in a
prospectus supplement (the "Property Trustee"). The Property Trustee will hold
title to the junior subordinated debt securities for the benefit of the holders
of the trust securities of Bank United Capital Trust. As holder of the junior
subordinated securities the Property Trustee will have the power to exercise all
rights, powers and privileges under the indenture related to the junior
subordinated debt securities. In addition, the Property Trustee will maintain
exclusive control of a segregated non-interest bearing bank account (the
"Property Account") to hold all payments made in respect of the junior
subordinated debt securities held by it for the benefit of the holders of the
trust preferred securities of Bank United Capital Trust. The Property Trustee
will make payments of distributions and payments on liquidation, redemption and
otherwise to the Property Account. Unless the Property Trustee maintains a
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, one Bank United Capital Trust trustee will have
its principal place of business or reside in the State of Delaware (the
"Delaware Trustee"). In limited circumstances that will be described in a
prospectus supplement relating to trust preferred securities, the holders of a
majority of the trust preferred securities will be entitled to appoint or remove
the Property Trustee or the Delaware Trustee.
6
<PAGE>
The rights of the holders of the trust securities, including economic
rights, rights to information and voting rights, are contained in the amended
declaration, the Delaware Business Trust Act and the Trust Indenture Act. We
will pay all fees and expenses related to Bank United Capital Trust and the
offering of trust securities, the payment of which will be guaranteed by us. The
office of the Delaware Trustee for Bank United Capital Trust in the State of
Delaware is The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711. The principal place of business of Bank United Capital
Trust will be c/o Bank United Corp., 3200 Southwest Freeway, Suite 2600,
Houston, Texas 77027 and its telephone number is (713) 543-6500.
7
<PAGE>
DESCRIPTION OF OFFERED SECURITIES
If so indicated in the applicable prospectus supplement, the terms of any
securities may differ from the terms set forth below.
CLASS A COMMON STOCK
As of July 22, 1999, we had 31,703,646 shares of Class A common stock
issued and outstanding and 3,762,270 shares reserved for issuance under our
stock option plans. The material provisions relating to our Class A common stock
can be found in our certificate of incorporation and by-laws, copies of which
have been filed with the Commission. See "Where You Can Find More
Information."
We have no other classes of common stock outstanding as of the date of this
prospectus.
PREFERRED STOCK
The following is a summary of the principal terms of our preferred stock.
This summary is not complete, may not contain all the information that is
important to you and is qualified in its entirety by the provisions of our
certificate of incorporation and by-laws, copies of which have been filed with
the Commission. See "Where You Can Find More Information."
Our board of directors is authorized by our certificate of incorporation to
provide, without further stockholder action, for the issuance of one or more
series of preferred stock. Our board of directors has the power to fix various
terms with respect to each series, including voting powers, designations,
preferences and relative, participating, optional or other special rights,
qualifications, limitations, restrictions and redemption, conversion or
exchangeability provisions.
The applicable prospectus supplement will contain the following principal
terms of the series of preferred stock offered thereby:
o the designation, number of shares and liquidation preference per
share;
o initial public offering price;
o the dividend rate or rates;
o the index, if any, upon which the amount of dividends, if any, is
determined;
o the dates on which dividends, if any, will accrue and be payable
and the designated record dates for determining the holders
entitled to such dividends;
o any redemption or sinking fund provisions;
o any conversion or exchange provisions;
o provisions for issuance of global securities;
o the securities exchange, if any, on which the preferred stock
will be listed;
o the currency, which may be composite currency, in which
dividends, if any, will be payable if other than U.S. dollars;
o voting rights; and
o any additional terms, preferences or rights.
Under regulations adopted by the Office of Thrift Supervision, if the
holders of shares of any series of our preferred stock become entitled to vote
for the election of directors because our board of directors has failed to
declare or pay dividends on that series, that series may then be deemed a class
of "voting securities." In that case, an institutional holder of 25% or more
of that series, or an institutional holder of five percent or more if it
otherwise exercises a "controlling influence" over us, may then be subject to
regulation as a savings and loan holding company in accordance with the Home
Owner's Loan Act. In addition, if and when a series is deemed a class of voting
securities, any other savings and loan holding company may be required to obtain
the prior approval of the OTS to acquire five percent or more of that series,
and any person other than a savings and loan holding company may be required to
obtain the prior approval of the OTS to acquire ten percent or more of that
series.
8
<PAGE>
The shares of preferred stock will, when issued, be fully paid and
nonassessable and will have no preemptive rights to subscribe for any additional
securities that we may issue. Unless otherwise specified in the applicable
prospectus supplement, the preferred stock will rank on a parity in all respects
with any outstanding preferred stock we may have and will have priority over our
common stock as to dividends and distributions of assets. Therefore, the rights
of any preferred stock that may subsequently be issued may limit the rights of
the holders of our common stock and preferred stock.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for each series of preferred stock will be specified in the applicable
prospectus supplement.
Because we are a holding company, our rights and the rights of our
creditors and our stockholders, including the holders of any shares of preferred
stock, to participate in any distribution of assets of any subsidiary upon the
subsidiary's liquidation or recapitalization will be subject to the prior claims
of the subsidiary's creditors, except to the extent that we may be a creditor
with recognized claims against the subsidiary.
The principal source of our revenues is dividends received from the Bank.
Various statutory provisions limit the amount of dividends the Bank and our
nonbank subsidiaries can pay without regulatory approval, and various
regulations can also restrict the payment of dividends. Changes in regulations
could further limit the ability of the Bank to pay dividends to us, and federal
statutes limit the ability of subsidiary banks to make loans to us.
DIVIDENDS. The holders of each series of our preferred stock will be
entitled to receive, when, as and if declared by our board of directors, out of
funds legally available for that purpose, cumulative or non-cumulative cash or
other dividends. We will describe the rate or rates and payment dates applicable
to each series of preferred stock in the applicable prospectus supplement. Those
rates may be fixed or variable or both. If variable, we will describe the
formula used for determining the dividend rate for each dividend period in the
applicable prospectus supplement. We will pay dividends to the holders of record
as they appear on our stock books on the record dates set by our board of
directors and specified in the applicable prospectus supplement. If our board of
directors fails to declare a dividend payable on a dividend payment date on any
series of the preferred stock for which dividends are noncumulative, then the
holders of these noncumulative series of the preferred stock will have no right
to receive a dividend in respect of the dividend period ending on that dividend
payment date, and we will have no obligation to pay a dividend for that period,
whether or not dividends on that series are declared payable on any future
dividend payment dates.
Unless otherwise indicated in the applicable prospectus supplement:
o we may not declare dividends on any other series or class of
preferred stock ranking on a parity as to dividends unless full
cumulative dividends on all outstanding shares of each series of
cumulative preferred stock have been paid in full or
contemporaneously are declared and paid through the most recent
dividend payment date; and
o in the event that full cumulative dividends on any series of
cumulative preferred stock have not been declared and paid or set
apart when due, we may not declare or pay any dividends or other
distributions on any other shares of our stock ranking junior to
the preferred stock, unless full cumulative dividends on that
series are made or set apart for payment; but
o we may, however, pay dividends or distributions in shares of
common stock, or using options, warrants or rights to subscribe
for or purchase shares of common stock or other junior ranking
stock.
REDEMPTION. The shares of any series of our preferred stock may be
redeemable at our option and may be subject to mandatory redemption under a
sinking fund or otherwise, in each case upon the terms, on the date or dates and
at the redemption price or prices set forth in the applicable prospectus
supplement. If fewer than all shares of preferred stock are to be redeemed, the
shares to be redeemed will be selected by us proportionately, by lot or by any
other method determined by our board of directors to be equitable.
9
<PAGE>
If we have not paid any dividends on shares of any series of preferred
stock when due:
o we may not redeem shares of common stock or shares of capital
stock ranking junior to or on parity with the preferred stock;
o we may not redeem shares of that series of preferred stock unless
we simultaneously redeem all outstanding shares of that series;
and
o we may not purchase or otherwise acquire any shares of that
series; but
o we may, however, purchase or acquire shares of that series under
a purchase or exchange offer made on the same terms to holders of
all shares of that series.
Any notice of redemption will be given by mailing the notice to each record
holder of the shares to be redeemed, not less than 40 days nor more than 70 days
prior to the redemption date, to the addresses of the holders as they appear on
our stock books. Each notice will state:
o the redemption date;
o the number of shares and series of preferred stock that we will
redeem;
o the redemption price and the manner in which we will pay and
deliver the redemption price;
o the place or places where holders must surrender certificates for
the shares of preferred stock to be redeemed in exchange for
payment of the redemption price;
o that dividends on the shares of preferred stock to be redeemed
will cease to accrue on the redemption date; and
o if we are redeeming fewer than all shares of any series of
preferred stock held by any holder, the number of shares that we
will redeem.
If we have given notice of redemption, unless we have defaulted in
providing the requisite funds to redeem the shares we call for redemption, from
and after the redemption date for the shares of the series of the preferred
stock we call for redemption:
o dividends on the shares of preferred stock called for redemption
will cease to accrue;
o any right to convert the shares of preferred stock of that series
will terminate;
o shares of preferred stock of that series will no longer be deemed
to be outstanding; and
o rights of the holders of the shares of preferred stock of that
series as our stockholders, except the right to receive the
redemption price, will cease.
Once holders surrender certificates in accordance with the redemption
notice, we will provide funds to pay, and will cause to be paid, the redemption
price indicated in the notice. Any shares so redeemed must be properly endorsed
or assigned for transfer, if our board of directors so requires and the
redemption notice so states. If fewer than all of the shares represented by any
certificate are redeemed, a new certificate will be issued representing the
unredeemed shares without cost to the holder thereof.
LIQUIDATION PREFERENCE. Upon our liquidation, dissolution or winding up,
the holders of shares of each series of our preferred stock will be entitled to
receive, out of our assets available for distribution to stockholders and before
any distribution of assets is made to or set apart for the holders of common
stock or any other shares of our stock ranking junior as to such a distribution
to the shares of that preferred series, an amount described in the applicable
prospectus supplement. If, upon our liquidation, dissolution or winding up, our
assets or the proceeds thereof are insufficient to pay in full the amounts
payable with respect to shares of each series of preferred stock and any other
shares of our stock ranking on a parity, as to any such distribution with that
series of preferred stock, the holders of shares of that series of preferred
stock and the other parity shares will share ratably in the distribution of our
assets in proportion to the full respective preferential amounts to which they
are entitled. After payment to the holders of shares of that series of preferred
stock of the full preferential amounts to which they are entitled, those holders
will not be entitled to any further participation in
10
<PAGE>
any distribution of assets by us, unless otherwise provided in the applicable
prospectus supplement. A consolidation or merger between us and one or more
corporations is not, for this purpose, a liquidation, dissolution or winding up.
The terms, if any, on which shares of any series of preferred stock are
convertible into or exchangeable for debt securities or common stock will be
contained in the applicable prospectus supplement. These terms may include
provisions for conversion or exchange, either mandatorily, at the option of the
holder or at our option, in which the number of shares of common stock to be
received by the holders of preferred stock would be calculated according to the
market price of common stock as of a time stated in the applicable prospectus
supplement.
DEPOSITARY SHARES
We may elect to offer fractional interests in shares of our preferred
stock, rather than full shares of preferred stock. In that case, we will cause a
bank or trust company we select, with its principal executive office in the
United States and a combined capital and surplus of at least $50,000,000 (a
"Depositary"), to issue to the public receipts (the "Depositary Receipts")
evidencing one or more fractional interests in a share of preferred stock we
deposit with the Depositary (the "Depositary Shares"). Each Depositary Share
will represent a fraction of a share of a particular series of preferred stock
as described below and detailed in the prospectus supplement relating to a
particular series of the preferred stock and the series of Depositary Shares
issued in respect thereof. The shares of any series of preferred stock
underlying the Depositary Shares will be deposited with a Depositary under a
separate deposit agreement (the "Deposit Agreement") between us and a
Depositary which may serve as a Depositary for more than one series of
Depositary Shares.
The following is a summary of the principal terms of the Depositary Shares
and the Deposit Agreement. This summary is not complete, may not contain all of
the information that is important to you and is qualified in its entirety by
reference to the Deposit Agreement and Depositary Receipts relating to each
series of preferred stock. We have filed the forms of Deposit Agreement and
Depositary Receipt as exhibits to the registration statement of which this
prospectus forms a part, or incorporate them by reference. Please review those
documents for further details not described in the summary below.
The applicable prospectus supplement relating to a series of Depositary
Shares will set forth the name and address of the principal executive office of
the Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of a
share of preferred stock represented by that Depositary Share, to all the rights
and preferences of the preferred stock represented by that Depositary Share,
including dividend, voting, redemption, conversion and liquidation rights.
We may order the Depositary to issue temporary Depositary Receipts to
holders in the event the definitive Depositary Receipts are not ready at the
time of distribution. The temporary Depositary Receipts will be substantially
identical to, and will entitle holders to all the rights pertaining to, the
definitive Depositary Receipts. We will then have definitive Depositary Receipts
prepared without unreasonable delay. Holders will be able to exchange temporary
Depositary Receipts for definitive Depositary Receipts at our expense.
Holders of Depositary Shares may surrender Depositary Receipts to the
Depositary (unless we have previously called for redemption of the related
Depositary Shares) and receive the number of whole shares of the related series
of preferred stock and any money or other property represented by those
Depositary Receipts. Holders will be entitled to receive whole shares of
preferred stock on the basis described in the applicable prospectus supplement.
After surrender of Depositary Receipts, holders will not be entitled to deposit
under the Deposit Agreement the shares of preferred stock received or to receive
Depositary Receipts for such shares of preferred stock. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of preferred stock to be withdrawn, the Depositary will deliver to that
holder at the same time a new Depositary Receipt evidencing the excess number of
Depositary Shares.
11
<PAGE>
We do not expect that there will be any public trading market for the
preferred stock represented by Depositary Receipts except as represented by the
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS. The Depositary will distribute all cash
dividends or other cash distributions received from us in respect of the
underlying shares of preferred stock to the record holders of Depositary Shares
relating to the preferred stock in proportion to the number of Depositary Shares
owned by those holders on the relevant record date. The Depositary will
distribute only the amount, however, that it can distribute without attributing
to any holder of Depositary Shares a fraction of one cent, and any balance it
does not distribute will be added to and treated as part of the next amount it
receives for distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received from us to the record holders of Depositary Shares
entitled to the distribution. If the Depositary determines that it is not
feasible to make such a distribution, it may, with our approval, sell the
property and distribute the net proceeds from that sale to those holders.
The Deposit Agreement will also contain provisions relating to the manner
in which the Depositary will make available to holders of Depositary Shares any
subscription or similar rights offered by us to holders of the series of
preferred stock underlying Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES. If we decide to redeem a series of the
preferred stock represented by Depositary Shares, the Depositary will redeem the
Depositary Shares from the proceeds it will receive as a result of the
redemption of the underlying preferred stock. The Depositary will mail a notice
of redemption not less than 30 and not more than 60 days prior to the redemption
date to the addresses of the record holders of the Depositary Shares as they
appear in the Depositary's books. The redemption price per Depositary Share will
equal the applicable fraction of the redemption price per share payable with
respect to the underlying series of the preferred stock. Whenever we redeem
preferred stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the shares of
preferred stock so redeemed. If less than all the Depositary Shares are to be
redeemed, the Depositary will select the Depositary Shares to be redeemed,
either proportionately or by lot.
After the redemption date, the Depositary Shares called for redemption will
no longer be deemed to be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the monies payable
upon redemption and any money or other property to which the holders of those
Depositary Shares were entitled upon redemption upon surrender to the Depositary
of the Depositary Receipts evidencing those Depositary Shares.
VOTING THE UNDERLYING PREFERRED STOCK. We will send to the Depositary all
notices of meetings at which the holders of shares of the series of preferred
stock held by the Depositary are entitled to vote. The Depositary will mail the
information contained in such a notice of meeting to the record holders of the
Depositary Shares relating to that series of preferred stock. Each record holder
of those Depositary Shares on the record date may instruct the Depositary how to
vote with respect to the number of shares of preferred stock represented by that
holder's Depositary Shares. The record date for Depositary Shares will be the
same date as the record date for the preferred stock. The Depositary will
endeavor, insofar as practicable, to vote the number of shares of preferred
stock underlying those Depositary Shares in accordance with any such
instructions. We will agree to take all actions deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of preferred stock for which it has not received
specific instructions from the holders of Depositary Shares representing those
shares of preferred stock.
TAXATION. The IRS will treat owners of Depositary Shares as if they were
owners of the preferred stock represented by those Depositary Shares, and,
accordingly, owners will be entitled to take into account for federal income tax
purposes, income and deductions to which they would be entitled if they were
holders of the preferred stock. In addition:
o owners will not recognize gain or loss for federal income tax
purposes upon the withdrawal of preferred stock in exchange for
Depositary Shares as provided in the Deposit Agreement;
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o the tax basis of each share of preferred stock to an exchanging
owner of Depositary Shares will, upon the exchange, be the same
as the total tax basis of the Depositary Shares exchanged; and
o the holding period for the preferred stock in the hands of an
exchanging owner of Depositary Shares will include the period
during which that person owned those Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT. We and the
Depositary may at any time amend the form of Depositary Receipts evidencing the
Depositary Shares and any provision of the Deposit Agreement. However, we may
not make any amendment that materially and adversely alters the rights of the
existing holders of Depositary Shares unless the record holders of at least a
majority of the Depositary Shares then outstanding approve the amendment. We or
the Depositary may terminate a Deposit Agreement only if:
o we have redeemed all Depositary Shares outstanding under the
Deposit Agreement; or
o there has been a final distribution in respect of the series of
preferred stock underlying the Depositary Shares in connection
with our liquidation, dissolution or winding up, and that
distribution has been made to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the Depositary in connection with the
initial deposit of the underlying shares of preferred stock and any redemption
of the preferred stock. Holders of Depositary Shares must pay other transfer and
other taxes and governmental charges and such other charges that the Deposit
Agreement requires them to pay.
MISCELLANEOUS. We will provide to the Depositary, and the Depositary will
forward to the holders of Depositary Shares, all reports and communications from
us that we are required to furnish to the holders of the underlying preferred
stock.
Neither we nor the Depositary will be liable if we are or it is prevented
or delayed by law or any circumstance beyond our control in performing our
obligations under the Deposit Agreement. Our obligations and the Depositary's
obligations under the Deposit Agreement are limited to performance in good faith
of our and their respective duties under the Deposit Agreement. In addition,
neither we nor the Depositary will be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or shares of underlying preferred
stock unless satisfactory indemnity is furnished. We and the Depositary may rely
upon written advice of counsel or accountants, or information provided by
persons presenting preferred stock for deposit, holders of Depositary Shares or
other persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY. The Depositary may resign at any
time by delivering to us notice of its election to do so. We may also at any
time remove the Depositary. Any resignation or removal of the Depositary will
take effect upon our appointment of a successor Depositary and its acceptance of
that appointment. We must appoint a successor Depositary within 60 days after
delivery of any notice of resignation by, or removal of, the Depositary. The
successor Depositary must be a bank or trust company with its principal office
in the United States and must have a combined capital and surplus of at least
$50,000,000.
JUNIOR SUBORDINATED DEBT SECURITIES
The following is a summary of the principal terms of the junior
subordinated debt preferred securities in which Bank United Capital Trust will
invest the proceeds from the issuance and sale of the trust securities. This
summary is not complete, may not contain all the information that is important
to you, and is qualified in its entirety by reference to the junior subordinated
indenture, between us and the Bank of New York, as trustee (the "Indenture
Trustee"), the form of which is filed as an exhibit to the registration
statement of which this prospectus forms a part or is incorporated by reference,
as well as to the Trust Indenture Act. Wherever particular sections or defined
terms of the junior subordinated indenture are referred to, those sections or
defined terms are
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incorporated in this prospectus by reference as part of the statement made, and
the statement is qualified in its entirety by that reference.
Under certain circumstances involving the dissolution of Bank United
Capital Trust, subject to obtaining any required regulatory approval, junior
subordinated debt securities will be distributed to the holders of the trust
securities in liquidation of Bank United Capital Trust. See "Trust Preferred
Securities -- Special Event Redemption or Distribution."
If the junior subordinated debt securities are distributed to the holders
of the trust preferred securities, we will use our best efforts to have the
junior subordinated debt securities listed on any national securities exchange
or similar organization on which the trust preferred securities are then listed
or quoted.
The junior subordinated indenture will not contain covenants or other
provisions that would afford protection to the holders of the junior
subordinated debt securities in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving us that
may adversely affect such holders.
We plan to sell junior subordinated debt securities to Bank United Capital
Trust under this prospectus. The applicable prospectus supplement relating to
the junior subordinated debt securities will contain the following terms:
o the title;
o any limit on the amount that may be issued;
o whether or not the junior subordinated debt securities will be
issued in global form, and if so, the terms and who the
depository will be;
o the securities exchange, if any, on which the junior subordinated
debt securities will be listed;
o the maturity date(s);
o the annual interest rate(s) (which may be fixed or variable) or
the method for determining the rate(s) and the date(s) interest
will begin to accrue, the date(s) interest will be payable and
the regular record dates for interest payment dates or the method
for determining those date(s);
o the place(s) where payments will be payable;
o our right, if any, to defer payment of interest and the maximum
length of any deferral period;
o the date, if any, after which, and the price(s) at which, the
junior subordinated debt securities may, under any optional
redemption provisions, be redeemed at our option, and other
related terms and provisions;
o the date(s), if any, on which, and the price(s) at which we are
obligated, under any mandatory sinking fund provisions or
otherwise, to redeem, or at the holder's option to purchase, the
junior subordinated debt securities and other related terms and
provisions;
o the denominations in which the junior subordinated debt
securities will be issued, if other than denominations of $1000
and any integral multiple thereof; and
o any other terms, none of which will be inconsistent with the
junior subordinated indenture.
CONVERSION OR EXCHANGE RIGHTS. The terms on which the junior subordinated
debt securities may be convertible into or exchangeable for Class A common stock
or any of our other securities will be contained in the applicable prospectus
supplement. These terms will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at our option, and may
include provisions under which the number of shares of Class A common stock or
other securities to be received by the holders of the junior subordinated debt
securities would be subject to adjustment.
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CONSOLIDATION, MERGER OR SALE. The junior subordinated indenture will not
contain any covenant which restricts our ability to merge or consolidate, or
sell, convey, transfer or otherwise dispose of all or substantially all of our
assets. Any successor or acquirer of such assets, however, must assume all of
our obligations under the junior subordinated indenture or the junior
subordinated debt securities, as appropriate.
ADDITIONAL INTEREST. Pursuant to the junior subordinated indenture, we
will agree to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority on Bank United Capital Trust, so that the net amounts
received and retained by Bank United Capital Trust after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts Bank United Capital Trust would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
OPTION TO EXTEND INTEREST PAYMENT PERIOD. We can defer interest payments
by extending the interest payment period for the number of consecutive extension
periods specified in the applicable prospectus supplement (each, an "Extension
Period"). No Extension Period may extend beyond the maturity of the junior
subordinated debt securities. At the end of the Extension Period(s), we will pay
all interest then accrued and unpaid, together with interest thereon compounded
quarterly at the rate specified for the junior subordinated debt securities to
the extent permitted by applicable law. During any Extension Period, we will not
make distributions related to our capital stock, including dividends,
redemptions, repurchases, liquidation payments, or guarantee payments. We may,
however, make distributions in connection with any of the following:
o repurchases, redemptions or other acquisitions of shares of our
capital stock in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants;
o an exchange or conversion of any class or series of our capital
stock for any other class or series of our capital stock; or
o the purchase of fractional interests in shares of our capital
stock under the conversion or exchange provisions of our capital
stock or the security being converted or exchanged.
In addition, during any Extension Period, we will not make distributions related
to our debt securities that rank equally with or junior to the junior
subordinated debt securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions. During Extension Periods, we
will, however, be able to pay stock dividends where the dividend stock is the
same stock as that on which the dividend is being paid.
Prior to the termination of any Extension Period, we may further defer
payments of interest by extending the Extension Period. However, an extended
Extension Period, including all previous and further extensions, may not extend
beyond the maturity of the junior subordinated debt securities. Upon the
termination of any Extension Period and the payment of all amounts then due, we
may commence a new Extension Period, subject to the terms described in this
section. Interest will not be due or payable during an Extension Period, except
at the end of the Extension Period.
We have no present intention of exercising our right to defer payments of
interest by extending the interest payment period on the junior subordinated
debt securities. If the Property Trustee is the sole holder of the junior
subordinated debt securities, we will give the Regular Trustees and the Property
Trustee notice of our selection of an Extension Period one business day before
the earlier of:
o the date distributions on the trust preferred securities would be
payable, if not for that Extension Period; and
o the date the Regular Trustees are required to give notice to the
NYSE or other applicable self-regulatory organization, or to
holders of the trust preferred securities, of the record date or
the date that distribution would be payable, if not for that
Extension Period, but in any event one business day before the
record date.
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The Regular Trustees will give notice of our selection of an Extension
Period to the holders of the trust preferred securities. If the Property Trustee
is not the sole holder of the junior subordinated debt securities, we will give
the holders of the junior subordinated debt securities notice of our selection
of an Extension Period ten business days before the earlier of:
o the next succeeding interest payment date; and
o the date upon which we are required to give notice to the NYSE or
other applicable self-regulatory organization, or to holders of
the junior subordinated debt securities, of the record or payment
date of the related interest payment.
As used in this prospectus, the term "business day" means any day other
than Saturday, Sunday or any other day on which banking institutions in New York
City are permitted or required by any applicable law to close.
EVENTS OF DEFAULT UNDER THE JUNIOR SUBORDINATED INDENTURE. The following
are events of default under the junior subordinated indenture with respect to
junior subordinated debt securities that we may issue to Bank United Capital
Trust:
o our failure to pay interest when due and that failure continues
for 30 days and the time for payment has not been extended or
deferred;
o our failure to pay the principal, or premium, if any, when due;
o our failure to observe or perform any other covenant contained in
the junior subordinated debt securities or the junior
subordinated indenture, and that failure continues for 90 days
after we receive notice from the Indenture Trustee or holders of
at least 25% of the total principal amount of the outstanding
junior subordinated debt securities; and
o our bankruptcy, insolvency or reorganization.
If an event of default with respect to the junior subordinated debt
securities occurs and is continuing, the Indenture Trustee or the holders of at
least 25% of the total principal amount of the outstanding junior subordinated
debt securities, by notice in writing to us (and to the Indenture Trustee if
notice is given by those holders), may declare the unpaid principal of, premium,
if any, and accrued interest, if any, due and payable immediately.
The holders of at least a majority of the total liquidation amount of the
trust preferred securities may waive any default or event of default with
respect to and its consequences, except defaults or events of default regarding:
o payment of principal, premium, if any, or interest; or
o certain covenants containing limitations on our ability to pay
dividends and make payments on debt securities in certain
circumstances.
Any such waiver will cure any default or event of default, other than those
described immediately above.
Subject to the terms of the junior subordinated indenture, if an event of
default under the junior subordinated indenture occurs and is continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the junior subordinated indenture at the request or direction of
any of the holders of the junior subordinated debt securities, unless those
holders have offered reasonable indemnity to the Indenture Trustee. The holders
of at least a majority of the total liquidation amount of the trust preferred
securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred on the Indenture Trustee, with respect
to the junior subordinated debt securities, provided that:
o it is not in conflict with any law or the applicable provisions
of the junior subordinated indenture;
o the Indenture Trustee may take any other action deemed proper by
it which is not inconsistent with such direction; but
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o subject to its duties under the Trust Indenture Act, the
Indenture Trustee need not take any action that might involve it
in personal liability or might be unduly prejudicial to the
holders not involved in the proceeding.
A holder of the junior subordinated debt securities will only have the
right to institute a proceeding under the junior subordinated indenture or to
appoint a receiver or trustee, or to seek other remedies if:
o the holder has given written notice to the Indenture Trustee of a
continuing event of default;
o the holders of at least 25% of the total principal amount of the
outstanding junior subordinated debt securities have made written
request, and those holders have offered reasonable indemnity to
the Indenture Trustee to institute the proceedings as trustee;
and
o the Indenture Trustee does not institute the proceeding and does
not receive from the holders of a majority of the total principal
amount of the outstanding junior subordinated debt securities
other conflicting directions within 60 days after the relevant
notice and request and offer of reasonable indemnity to the
Indenture Trustee.
These limitations, however, do not apply to a suit instituted by a holder of
junior subordinated debt securities if we default in the payment of the
principal, premium, if any, or interest on, the junior subordinated debt
securities.
We will periodically file statements with the Indenture Trustee regarding
our compliance with certain of the covenants in the junior subordinated
indenture.
If an event of default under the amended declaration has occurred and is
attributable to our failure to pay principal, premium, if any, or interest on,
the junior subordinated debt securities, then each holder of the trust preferred
securities may sue us or seek other remedies to force payment to that holder of
the principal of, premium, if any, or interest on, the junior subordinated debt
securities having a principal amount equal to the total liquidation amount of
the trust preferred securities held by that holder. If you sue us to collect
payment, then we will assume your rights as a holder of trust preferred
securities under the amended declaration to the extent we make a payment to you
in any similar legal action. The holders of trust preferred securities will not
be able to exercise directly any other remedy available to the holders of the
junior subordinated debt securities.
CERTAIN COVENANTS. If the junior subordinated debt securities are issued
to Bank United Capital Trust or a trustee of Bank United Capital Trust in
connection with the issuance of trust preferred securities by Bank United
Capital Trust, and
o there has occurred and is continuing an event of default under
the junior subordinated indenture,
o we are in default with respect to our payment of any obligations
under the trust preferred securities guarantee, or
o we have given notice of our election to defer payments of
interest on the junior subordinated debt securities by extending
the interest payment period as provided in the junior
subordinated indenture and that period, or any extension thereof,
is continuing,
then:
o we may not make distributions related to our debt securities that
rank equally with or junior to the junior subordinated debt
securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions, and
o may not make distributions related to our capital stock,
including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments, except that we may make
distributions in connection with any of the following:
1) repurchases, redemptions or other acquisitions of shares of
our capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or
consultants,
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2) an exchange or conversion of any class or series of our
capital stock for any other class or series of our capital
stock, or
3) the purchase of fractional interests in shares of our
capital stock under the conversion or exchange provisions of
such capital stock or the security being converted or
exchanged.
These prohibitions will not, however, apply to any stock dividends we pay where
the dividend stock is the same class of stock as that on which the dividend is
being paid.
In addition, as long as the trust preferred securities remain outstanding,
we will covenant:
o to directly or indirectly maintain 100% ownership of the trust
common securities of Bank United Capital Trust; provided,
however, that any permitted successor of ours under the junior
subordinated indenture may succeed to our ownership of the trust
common securities;
o to not voluntarily dissolve, wind-up or terminate Bank United
Capital Trust, except in connection with a distribution of junior
subordinated debt securities as described under "Distribution of
the Junior Subordinated Debt Securities" and in connection with
certain mergers, consolidations or amalgamations permitted by the
amended declaration;
o to timely perform our duties as sponsor of Bank United Capital
Trust; and
o to use reasonable efforts to cause Bank United Capital Trust to
1) remain a statutory business trust, except in connection with
the distribution of junior subordinated debt securities to
the holders of trust preferred securities in the event of
the liquidation of Bank United Capital Trust, the redemption
of all of the trust preferred securities of Bank United
Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the amended declaration,
and
2) otherwise continue to be classified as a grantor trust for
U.S. federal income tax purposes.
DISCHARGE AND DEFEASANCE. We may discharge all our obligations (except
those described below) to holders of the junior subordinated debt securities
issued under the junior subordinated indenture, which junior subordinated debt
securities have not already been delivered to the Indenture Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year, or are to be called for redemption within one
year, by depositing with the Indenture Trustee an amount certified to be
sufficient to pay when due the principal of and premium, if any, and interest on
all outstanding junior subordinated debt securities and to make any mandatory
sinking fund payments on those securities when due.
Unless otherwise specified in this prospectus with respect to the junior
subordinated debt securities:
(1) We, at our option, will be discharged from any and all obligations in
respect of the junior subordinated debt securities. However, we will
not be discharged from our obligations:
a) to pay all expenses of Bank United Capital Trust,
b) to register the transfer or exchange of junior subordinated debt
securities,
c) to replace mutilated, defaced, destroyed, lost or stolen junior
subordinated debt securities, and
d) to maintain paying agents and hold monies for payment in trust.
(2) If we deposit with the Indenture Trustee, in trust, money or U.S.
government obligations that through the payment of interest on that
money or those obligations and payment of their principal in
accordance with their terms will provide money in an amount sufficient
to pay all the principal of and premium, if any, and any interest on
the junior subordinated debt
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securities on the dates those payments are due, which may include one
or more redemption dates designated by us, in accordance with the
terms of the junior subordinated debt securities, then
a) we, at our option, need not comply with certain covenants
specified in this prospectus with respect to the junior
subordinated debt securities, and
b) the occurrence of an event described in the third bullet point of
the first paragraph under "-- Events of Default Under the Junior
Subordinated Indenture" above with respect to any defeased
covenant and any other event of default provided in the
applicable resolution of the board of directors or supplemental
indenture under which the junior subordinated debt securities are
issued will no longer be an event of default.
A trust described in clause (2) of the paragraph immediately above may only
be established, if, among other things, the Indenture Trustee has received an
opinion of counsel to the effect that the holders of the junior subordinated
debt securities will not recognize gain or loss for federal income tax purposes
as a result of any deposit or defeasance described in the paragraph immediately
above and will be subject to federal income tax in the same manner as if that
defeasance had not occurred, which, in the case of a discharge under clause (1)
above, must be based upon a ruling or administrative pronouncement of the IRS.
In the event we fail to comply with our remaining obligations under the junior
subordinated indenture after a defeasance of the junior subordinated indenture
with respect to the junior subordinated debt securities as described under
clause (2) above and the junior subordinated debt securities are declared due
and payable because of the occurrence of any undefeased event of default, the
amount of money and U.S. government obligations on deposit with the Indenture
Trustee may be insufficient to pay amounts due on the junior subordinated debt
securities at the time of the acceleration resulting from that event of default.
However, we will remain liable in respect of those payments.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE; WAIVER. Together with the
Indenture Trustee, we may change the junior subordinated indenture without the
consent of any holders with respect to a number of matters, including:
o to fix any ambiguity, defect or inconsistency in the junior
subordinated indenture; and
o to change anything that does not materially adversely affect the
interests of any holder of junior subordinated debt securities.
In addition, under the junior subordinated indenture, we and the Indenture
Trustee may change the rights of holders of the junior subordinated debt
securities with the written consent of the holders of at least a majority of the
total liquidation amount of the trust preferred securities. However, the
following changes may only be made with the consent of each holder of the junior
subordinated debt securities:
o extending the fixed maturity of the junior subordinated debt
securities;
o reducing the principal amount, reducing the rate of or extending
the time of payment of interest on or any premium payable upon
the redemption of any junior subordinated debt securities; or
o reducing the percentage of junior subordinated debt securities, the
holders of which are required to consent to any amendment or waive
our compliance with any covenant or past default.
If the consent of the Property Trustee, as holder of the junior
subordinated debt securities, is required to consent to any amendment,
modification or termination of the junior subordinated indenture, the Property
Trustee will request directions from the holders of the trust preferred
securities.
FORM, EXCHANGE, AND TRANSFER. The junior subordinated debt securities will
be issuable only in fully registered form without coupons and, unless otherwise
specified in the applicable prospectus supplement, in denominations of $1,000
and any integral multiple thereof.
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At the option of the holder, subject to the terms of the junior
subordinated indenture and the limitations applicable to global securities
described in the applicable prospectus supplement, junior subordinated debt
securities will be exchangeable for other junior subordinated debt securities,
in any authorized denomination and of like tenor and total principal amount.
Subject to the terms of the junior subordinated indenture and the
limitations applicable to global securities set forth in the applicable
prospectus supplement, junior subordinated debt securities may be presented for
exchange or for registration of transfer, duly endorsed or with the form of
transfer endorsed on them duly executed if we or the Indenture Trustee so
require, at the office of the security registrar or at the office of any
transfer agent we designate for that purpose. Unless otherwise provided in the
junior subordinated debt securities to be transferred or exchanged, no service
charge need be made for any registration of transfer or exchange, but we may
require the holder to pay any taxes or other governmental charges. We have
appointed the Indenture Trustee as security registrar. Any transfer agent in
addition to the security registrar we initially designate for any junior
subordinated debt securities will be named in the applicable prospectus
supplement. We may at any time designate additional transfer agents or rescind
the designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that we will be required to maintain a
transfer agent in each place of payment for the junior subordinated debt
securities.
If the junior subordinated debt securities are to be redeemed, we will not
be required to:
o issue, register the transfer of, or exchange any junior
subordinated debt securities during a period beginning at the
opening of business 15 days before the day of mailing of a notice
of redemption of any of the junior subordinated debt securities
that may be selected for redemption and ending at the close of
business on the day of such mailing, or
o register the transfer of or exchange any junior subordinated debt
securities so selected for redemption, in whole or in part,
except the unredeemed portion of any of the junior subordinated
debt securities being redeemed in part.
INFORMATION CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE. The
Indenture Trustee, other than during the occurrence and continuance of an event
of default under the junior subordinated indenture, undertakes to perform only
the duties that are specifically contained in the junior subordinated indenture
and, upon an event of default under an junior subordinated indenture, must use
the same degree of care as a prudent person would exercise or use in the conduct
of his or her own affairs. Subject to this provision, the Indenture Trustee is
under no obligation to exercise any of the powers given to it by the junior
subordinated indenture at the request of any holder of junior subordinated debt
securities unless it is offered reasonable security and indemnity against the
costs, expenses and liabilities that it might incur. The Indenture Trustee is
not required to spend or risk its own money or otherwise become financially
liable while performing its duties unless it reasonably believes that it will be
repaid or receive adequate indemnity.
PAYMENT AND PAYING AGENTS. Unless otherwise indicated in the applicable
prospectus supplement, payment of the interest on any junior subordinated debt
securities on any interest payment date will be made to the person in whose name
those junior subordinated debt securities, or one or more predecessor
securities, are registered at the close of business on the regular record date
for such interest.
Principal of and any premium and interest on the junior subordinated debt
securities will be payable at the office of the paying agents designated by us,
except that, unless otherwise indicated in the applicable prospectus supplement,
interest payments may be made by check mailed to the holder. Unless otherwise
indicated in the prospectus supplement, the corporate trust office of the
Indenture Trustee in the City of New York will be designated as our sole paying
agent for payments with respect to junior subordinated debt securities. We will
be required to maintain a paying agent in each place of payment for the junior
subordinated debt securities.
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All monies we pay to a paying agent or the Indenture Trustee for the
payment of the principal of or any premium or interest on any junior
subordinated debt securities which remains unclaimed at the end of two years
after the principal, premium or interest has become due and payable will be
repaid to us, and the holder of the security thereafter may look only to us for
payment thereof.
SUBORDINATION OF JUNIOR SUBORDINATED DEBT SECURITIES. The junior
subordinated debt securities will be unsecured and will be subordinate and
junior in priority of payment to certain of our other indebtedness to the extent
described in the applicable prospectus supplement. The junior subordinated
indenture does not limit the amount of junior subordinated debt securities which
we may issue, nor does it limit us from issuing any other secured or unsecured
debt.
GLOBAL SECURITIES. The junior subordinated debt securities may be issued
in whole or in part in the form of one or more global securities that will be
deposited with, or on behalf of, a depositary identified in the applicable
prospectus supplement (the "Global Securities"). Global Securities will be
issued in registered form and in either temporary or permanent form. Unless and
until it is exchanged for junior subordinated debt securities in definitive
form, a temporary Global Security may not be transferred except as a whole by
the depositary for that Global Security to a nominee of the depositary or any
such nominee to a successor of the depositary or a nominee of that successor.
The specific terms of the depositary arrangement with respect to the junior
subordinated debt securities will be described in the applicable prospectus
supplement. We anticipate that the following provisions will apply to any
depositary arrangements.
Upon the issuance of a Global Security, the depositary for the Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the securities represented by the Global
Security. Those accounts will be designated by the underwriters or agents with
respect to those securities or by us if such securities are offered and sold
directly by us. Ownership of beneficial interests in a Global Security will be
limited to participants, who are persons that have accounts with the depositary
for the Global Security or its nominee, or persons that may hold interests
through participants. Ownership of beneficial interests in the Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the depositary, with respect to participants'
interests, for the Global Security or by participants or persons that hold
securities through participants with respect to beneficial owners' interests.
FEES AND EXPENSES. The junior subordinated indenture provides that we will
pay all fees and expenses related to:
o the offering of the trust preferred securities and the junior
subordinated debt securities;
o the organization, maintenance and dissolution of Bank United
Capital Trust;
o the retention of the Bank United Capital Trust trustees; and
o the enforcement by the Property Trustee of the rights of the
holders of the trust preferred securities.
GOVERNING LAW. The junior subordinated indenture and the junior
subordinated debt securities will be governed by and construed in accordance
with the laws of the State of New York except to the extent that the Trust
Indenture Act is applicable.
TRUST PREFERRED SECURITIES
The following is a summary of the principal terms of the trust preferred
securities. This summary is not complete, may not include all the information
that is important to you, and is qualified in its entirety by reference to the
amended declaration, the Delaware Business Trust Act and the Trust Indenture
Act. The amended declaration is filed as an exhibit to the registration
statement of which this prospectus forms a part, or is incorporated by
reference. The terms of the trust preferred securities will include those stated
in the amended declaration and those made part of the amended declaration by the
Trust Indenture Act.
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The amended declaration authorizes the Regular Trustees to issue, on behalf
of Bank United Capital Trust, two classes of trust securities, trust preferred
securities and trust common securities, each of which will have the terms
described in the applicable prospectus supplement. The proceeds from the sale of
the trust preferred securities will be used by Bank United Capital Trust to
purchase our junior subordinated debt securities. These junior subordinated debt
securities will be held in trust by the Property Trustee for the benefit of the
holders of the trust securities.
We will guarantee the payments of distributions and payments on redemption
or liquidation with respect to the trust preferred securities, but only to the
extent Bank United Capital Trust has funds available to make those payments and
has not made the payments. See "Guarantees."
The assets of Bank United Capital Trust available for distribution to the
holders of trust preferred securities will be limited to payments from us under
the junior subordinated debt securities held by Bank United Capital Trust. If we
fail to make a payment on the junior subordinated debt securities, Bank United
Capital Trust will not have sufficient funds to make related payments, including
distributions, on its trust preferred securities.
The trust preferred securities guarantee, when taken together with our
obligations under the junior subordinated debt securities, the junior
subordinated indenture related thereto and the amended declaration, will provide
a full and unconditional guarantee of amounts due on the trust preferred
securities issued by Bank United Capital Trust.
The trust preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and other preferred,
deferred or other special rights or restrictions that are described in the
amended declaration or made part of the amended declaration by the Trust
Indenture Act or the Delaware Business Trust Act. The terms of the trust
preferred securities will mirror the terms of the junior subordinated debt
securities held by Bank United Capital Trust. In other words, the distribution
rate and the distribution payment dates and other payment dates for the trust
preferred securities will correspond to the interest rate and interest payment
dates and other payment dates on the junior subordinated debt securities.
The applicable prospectus supplement will set forth the principal terms of
the trust preferred securities that will be offered, including:
o the name of the trust preferred securities;
o the liquidation amount and number of trust preferred securities
issued;
o the annual distribution rate(s) or method of determining such
rate(s), the payment date(s) and the record dates used to
determine the holders who are to receive distributions;
o the date from which distributions will be cumulative;
o the optional redemption provisions, if any, including the prices,
time periods and other terms and conditions on which the trust
preferred securities will be purchased or redeemed, in whole or
in part;
o the terms and conditions, if any, upon which the junior
subordinated debt securities and the related trust preferred
securities guarantee may be distributed to holders of those trust
preferred securities;
o any securities exchange on which the trust preferred securities
will be listed;
o whether the trust preferred securities are to be issued in
book-entry form and represented by one or more global
certificates, and if so, the depository for those global
certificates and the specific terms of the depositary
arrangements; and
o any other relevant rights, preferences, privileges, limitations
or restrictions of the trust preferred securities.
The applicable prospectus supplement will also describe certain U.S. federal
income tax considerations applicable to the purchase, holding and disposition of
such trust preferred securities.
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EXTENSIONS. We have the right under the junior subordinated indenture to
defer payments of interest on the junior subordinated debt securities by
extending the interest payment period from time to time on the junior
subordinated debt securities. The Regular Trustees will give the holders of the
trust preferred securities notice of any Extension Period upon their receipt of
notice thereof from us. If distributions are deferred, the deferred
distributions and accrued interest thereon will be paid to holders of record of
the trust preferred securities as they appear on the books and records of Bank
United Capital Trust on the record date next following the termination of such
deferral period. See "Description of the Junior Subordinated Debt
Securities -- Interest" and "-- Option to Extend Interest Payment Period."
Distributions on the trust preferred securities will be made on the dates
payable to the extent that Bank United Capital Trust has funds available for the
payment of distributions in the Property Account. Bank United Capital Trust's
funds available for distribution to the holders of the trust securities will be
limited to payments received from us on the junior subordinated debt securities.
We have guaranteed the payment of distributions out of monies held by Bank
United Capital Trust to the extent set forth under "-- Guarantees."
Distributions on the trust preferred securities will be payable to the
holders named on the securities register of Bank United Capital Trust at the
close of business on the relevant record dates, which, as long as the trust
preferred securities remain in book-entry only form, will be one business day
prior to the relevant payment dates. Distributions will be paid through the
Property Trustee who will hold amounts received in respect of the junior
subordinated debt securities in the Property Account for the benefit of the
holders of the trust securities. In the event that the trust preferred
securities do not continue to remain in book-entry only form, the relevant
record dates will conform to the rules of any securities exchange on which the
trust preferred securities are listed and, if none, the Regular Trustees will
have the right to select relevant record dates, which will be more than 14 days
but less than 60 days prior to the relevant payment dates. In the event that any
date on which distributions are to be made on the trust preferred securities is
not a business day, then payment of the distributions payable on that date will
be made on the next succeeding day which is a business day and without any
interest or other payment in respect of that delay, except that, if that
business day is in the next succeeding calendar year, the payment will be made
on the immediately preceding business day, in each case with the same force and
effect as if made on the record date.
MANDATORY REDEMPTION OF TRUST PREFERRED SECURITIES. The trust preferred
securities have no stated maturity date, but will be redeemed upon the maturity
of the junior subordinated debt securities or to the extent the junior
subordinated debt securities are redeemed prior to maturity. The junior
subordinated debt securities will mature on the date specified in the applicable
prospectus supplement and may be redeemed at any time, in whole but not in part,
in certain circumstances upon the occurrence of a Tax Event, an Investment
Company Event or a Regulatory Capital Event as described under "-- Special
Event Redemption."
Upon the maturity of the junior subordinated debt securities, the proceeds
of their repayment will simultaneously be applied to redeem all the outstanding
trust securities at the Redemption Price. Upon the redemption of the junior
subordinated debt securities, either at our option or as a result of a Tax
Event, an Investment Company Event or a Regulatory Capital Event, the proceeds
from the redemption will simultaneously be applied to redeem trust securities
having a total liquidation amount equal to the total principal amount of the
junior subordinated debt securities so redeemed at the redemption price;
provided, that holders of trust securities will be given not less than 30 nor
more than 60 days' notice of the redemption. In the event that fewer than all of
the outstanding trust securities are to be redeemed, the trust securities will
be redeemed proportionately.
SPECIAL EVENT REDEMPTION. Subject to obtaining any required regulatory
approval, if a Tax Event, an Investment Company Event or a Regulatory Capital
Event (each, a "Special Event") occurs and is continuing, we will have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the junior
subordinated debt securities, in whole but not in part, for cash within 90 days
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following the occurrence of that Special Event. Following the redemption, Bank
United Capital Trust will use the proceeds to redeem all the outstanding trust
securities. However, if at the time there is available to us or Bank United
Capital Trust the opportunity to eliminate, within that 90-day period, the
Special Event by taking some ministerial action, such as filing a form or making
an election or pursuing some other similar reasonable measure that will have no
adverse effect on us, Bank United Capital Trust, or the holders of the trust
securities, then we or Bank United Capital Trust will pursue that measure in
lieu of redemption.
The following events constitute Special Events for purposes of the
redemption provisions described in the preceding paragraph.
o "TAX EVENT" means that the Regular Trustees have received an
opinion of independent tax counsel experienced in those matters
to the effect that, as a result of:
1) any amendment to, change or announced proposed change in,
the laws or regulations of the United States or any of its
political subdivisions or taxing authorities, or
2) any official administrative pronouncement, action or
judicial decision interpreting or applying those laws or
regulations, which amendment or change becomes effective or
proposed change, pronouncement, action or decision is
announced on or after the date the trust preferred
securities are issued and sold
there is more than an insubstantial risk that:
a) Bank United Capital Trust is or within 90 days would be
subject to U.S. federal income tax with respect to
income accrued or received on the junior subordinated
debt securities,
b) interest payable to Bank United Capital Trust on the
junior subordinated debt securities is not or within 90
days would not be deductible, in whole or in part, by
us for U.S. federal income tax purposes, or
c) Bank United Capital Trust is or within 90 days would be
subject to a material amount of other taxes, duties or
other governmental charges.
o "INVESTMENT COMPANY EVENT" means that the Regular Trustees have
received an opinion of a nationally recognized independent
counsel to the effect that, as a result of an amendment to or
change in the Investment Company Act or regulations thereunder on
or after the date the trust preferred securities are issued and
sold, there is more than an insubstantial risk that Bank United
Capital Trust is or will be considered an "investment company"
and be required to be registered under the Investment Company
Act.
o "REGULATORY CAPITAL EVENT" means that we have received an opinion
of independent bank regulatory counsel experienced in those
matters to the effect that, as a result of
1) any amendment to or change (including any announced
prospective change) in the laws or any regulations
thereunder of the United States or any rules, guidelines or
policies of the applicable regulatory authorities having
jurisdictions over us, or
2) any official administrative pronouncement or judicial
decision interpreting or applying those laws or regulations
which is announced or becomes effective after the date of
original issuance of the trust preferred securities,
the trust preferred securities do not constitute, or within 90 days of
the date of that event would not constitute, Tier 1 capital or its then
equivalent applied as if we were a bank holding company, as that
concept is used in the guidelines or regulations issued by the Board of
Governors of the Federal Reserve System. However, the distribution of
junior subordinated debt securities by Bank United Capital Trust in
connection with its liquidation will not, in and of itself, be a
"Regulatory Capital Event" unless the liquidation occurs in
connection with a Tax Event or an Investment Company Event.
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DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES. We will have the
right at any time to dissolve Bank United Capital Trust and, after satisfaction
of the liabilities of creditors of Bank United Capital Trust as provided by
applicable law, to cause junior subordinated debt securities to be distributed
to the holders of the trust preferred securities in a total stated principal
amount equal to the total stated liquidation amount of the trust preferred
securities then outstanding. Prior to any such dissolution, we will obtain any
required regulatory approvals. The right to dissolve the trust and distribute
the junior subordinated debt securities will be conditioned on our receipt of an
opinion rendered by an independent tax counsel that the distribution would not
result in the recognition of gain or loss for federal income tax purposes by the
holders.
If the junior subordinated debt securities are distributed to the holders
of the trust securities, we will use our best efforts to cause the junior
subordinated debt securities to be listed on the NYSE or on any other exchange
that the trust preferred securities are then listed.
After the date for any distribution of junior subordinated debt securities
upon dissolution of Bank United Capital Trust:
o the trust preferred securities will no longer be deemed to be
outstanding;
o the securities depositary or its nominee, as the record holder of
the trust preferred securities, will receive a registered global
certificate or certificates representing the junior subordinated
debt securities to be delivered upon such distribution; and
o any certificates representing trust preferred securities not held
by the depositary or its nominee will be deemed to represent
junior subordinated debt securities having a total principal
amount equal to the total stated liquidation amount of, with an
interest rate identical to the distribution rate of, and with
accrued and unpaid interest equal to accrued and unpaid
distributions on, those trust preferred securities until those
certificates are presented to us or our agent for transfer or
reissuance.
We cannot provide any assurance as to the market prices for either the
trust preferred securities or the junior subordinated debt securities that may
be distributed in exchange for the trust preferred securities if a dissolution
and liquidation of Bank United Capital Trust were to occur. Accordingly, the
trust preferred securities that an investor may purchase, whether as a result of
the offer made through this prospectus or in the secondary market, or the junior
subordinated debt securities that an investor may receive if a dissolution and
liquidation of Bank United Capital Trust were to occur, may trade at a discount
to the price that the investor paid to purchase the trust preferred securities
offered through this prospectus.
REDEMPTION PROCEDURES. Bank United Capital Trust may not redeem fewer than
all the outstanding trust securities unless all accrued and unpaid distributions
have been paid on all trust securities for all distribution periods terminating
on or before the date of redemption. In the event that fewer than all of the
outstanding trust securities are to be redeemed, the trust securities will be
redeemed proportionately.
If Bank United Capital Trust gives a notice of redemption in respect of the
trust securities, which notice will be irrevocable, then, by 12:00 noon, New
York City time, on the redemption date, and if we have paid to the Property
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the junior subordinated debt securities, the Property Trustee will
irrevocably deposit with the depositary funds sufficient to pay the applicable
Redemption Price and will give the depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the trust preferred
securities, and the paying agent will pay the applicable Redemption Price to the
holders of the trust common securities by check. If notice of redemption has
been given and funds deposited as required, then, immediately prior to the close
of business on the date of the deposit, distributions will cease to accrue and
all rights of holders of trust preferred securities so called for redemption
will cease, except the right of the holders of the trust preferred securities to
receive the Redemption Price but without interest on the Redemption Price. In
the event that any date fixed for redemption of trust
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preferred securities is not a business day, then payment of the Redemption Price
payable on that date will be made on the next succeeding day that is a business
day, without any interest or other payment in respect of any such delay, except
that, if that business day falls in the next calendar year, payment will be made
on the immediately preceding business day. In the event that payment of the
Redemption Price in respect of trust preferred securities is improperly withheld
or refused and not paid either by Bank United Capital Trust or by us under the
trust preferred securities guarantee, distributions on the trust preferred
securities will continue to accrue at the then applicable rate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to the foregoing and applicable law, including, without limitation,
U.S. federal securities laws, we or our subsidiaries may at any time, and from
time to time, purchase outstanding trust preferred securities by tender, in the
open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION. The amended declaration states
that Bank United Capital Trust will be dissolved:
o on the expiration of the term of Bank United Capital Trust;
o upon our bankruptcy;
o upon the filing of a certificate of dissolution or its equivalent
with respect to us;
o upon the filing of a certificate of cancellation with respect to
Bank United Capital Trust after obtaining the consent of at least
a majority in liquidation amount of the trust preferred
securities, voting together as a single class;
o 90 days after the revocation of our charter, but only if the
charter is not reinstated during that 90-day period;
o upon the distribution of the related junior subordinated debt
securities directly to the holders of the trust securities;
o upon the redemption of all of the trust securities; or
o upon entry of a court order for the dissolution of us or Bank
United Capital Trust.
In the event of a dissolution, after Bank United Capital Trust pays all
amounts owed to creditors, the holders of the trust preferred securities will be
entitled to receive:
o cash equal to the total liquidation amount of each trust
preferred security specified in an accompanying prospectus
supplement, plus accumulated and unpaid distributions to the date
of payment, or
o junior subordinated debt securities in a total principal amount
equal to the total liquidation amount of the trust preferred
securities.
If Bank United Capital Trust cannot pay the full amount due on its trust
securities because insufficient assets are available for payment, then the
amounts payable by Bank United Capital Trust on its trust securities will be
paid proportionately. However, if an event of default under the related amended
declaration has occurred, the total amounts due on the trust preferred
securities will be paid before any distribution on the trust common securities.
DECLARATION EVENTS OF DEFAULT. An event of default under the junior
subordinated indenture relating to the junior subordinated debt securities is an
event of default under the amended declaration (a "Declaration Event of
Default"). See "-- Junior Subordinated Debt Securities -- Events of Default
Under the Junior Subordinated Indenture."
In addition, the voluntary or involuntary dissolution, winding up or
termination of Bank United Capital Trust is also a Declaration Event of Default,
except in connection with:
o the distribution of the junior subordinated debt securities to
holders of the trust securities of Bank United Capital Trust,
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o the redemption of all of the trust securities of Bank United
Capital Trust, and
o mergers, consolidations or amalgamations permitted by the amended
declaration of Bank United Capital Trust.
Under the amended declaration, the holder of the trust common securities
will be deemed to have waived any Declaration Event of Default with respect to
the trust common securities until all Declaration Events of Default with respect
to the trust preferred securities have been cured, waived or otherwise
eliminated. Until all Declaration Events of Default with respect to the trust
preferred securities have been so cured, waived, or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the holders of
the trust preferred securities and only the holders of the trust preferred
securities will have the right to direct the Property Trustee with respect to
certain matters under the amended declaration and the junior subordinated
indenture. In the event that any Declaration Event of Default with respect to
the trust preferred securities is waived by the holders of the trust preferred
securities as provided in the amended declaration, under the amended declaration
the holders of trust common securities have agreed that the waiver also
constitutes a waiver of the Declaration Event of Default with respect to the
trust common securities for all purposes under the amended declaration without
any further act, vote or consent of the holders of trust common securities.
We and the Regular Trustees must file annually with the Property Trustee a
certificate evidencing compliance with all the applicable conditions and
covenants under the amended declaration.
Upon the occurrence of a Declaration Event of Default, the Property
Trustee, as the sole holder of the junior subordinated debt securities, will
have the right under the junior subordinated indenture to declare the principal
of, premium, if any, and interest on the junior subordinated debt securities to
be immediately due and payable.
If a Property Trustee fails to enforce its rights under the amended
declaration or the junior subordinated indenture to the fullest extent permitted
by law and subject to the terms of the amended declaration and the junior
subordinated indenture, any holder of trust preferred securities may sue us, or
seek other remedies, to enforce the Property Trustee's rights under the amended
declaration or the junior subordinated indenture without first instituting a
legal proceeding against the Property Trustee or any other person. If a
Declaration Event of Default occurs and is continuing as a result of our failure
to pay principal of or premium, if any, or interest on the junior subordinated
debt securities when payable, then a holder of the trust preferred securities
may directly sue us or seek other remedies, to collect its proportionate share
of payments owned. See "Relationship Among The Trust Preferred Securities, The
Trust Preferred Securities Guarantee And The Junior Subordinated Notes Held By
Bank United Capital Trust."
REMOVAL AND REPLACEMENT OF TRUSTEES. Only the holders of trust common
securities have the right to remove or replace the trustees of Bank United
Capital Trust, except that while an event of default in respect of the junior
subordinated debt securities has occurred or is continuing, the holders of a
majority of the trust preferred securities will have this right. The resignation
or removal of any trustee and the appointment of a successor trustee will be
effective only on the acceptance of appointment by the successor trustee in
accordance with the provisions of the amended declaration.
CONVERSION OR EXCHANGE RIGHTS. The terms on which the trust preferred
securities are convertible into or exchangeable for common stock or our other
securities will be contained in the applicable prospectus supplement. Those
terms will include provisions as to whether conversion or exchange is mandatory,
at the option of the holder or at our option, and may include provisions under
which the number of shares of common stock or our other securities to be
received by the holders of trust preferred securities would be subject to
adjustment.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS OF BANK UNITED CAPITAL
TRUST. Bank United Capital Trust may not consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease their properties and assets
substantially as an entirety to any other corporation or other body (each, a
"Merger Event"), except as described below. Bank United Capital Trust may,
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with the consent of a majority of its Regular Trustees and without the consent
of the holders of its trust securities, consolidate, amalgamate, merge with or
into, or be replaced by another trust, provided that:
o the successor entity either
1) assumes all of the obligations of Bank United Capital Trust
relating to its trust securities, or
2) substitutes other securities for the trust securities that
are substantially similar to the trust securities, so long
as the successor securities rank the same as the trust
securities for distributions and payments upon liquidation,
redemption and otherwise;
o we acknowledge a trustee of the successor entity who has the same
powers and duties as the Property Trustee of Bank United Capital
Trust, as the holder of the junior subordinated debt securities;
o the trust preferred securities are listed, or any successor
securities will be listed, upon notice of issuance, on the same
securities exchange or other organization that the trust
preferred securities are then listed;
o the Merger Event does not cause the trust preferred securities or
successor securities to be downgraded by any nationally
recognized rating agency;
o the Merger Event does not adversely affect the rights,
preferences and privileges of the holders of the trust securities
or successor securities in any material way, other than with
respect to any dilution of the holders' interest in the new
entity;
o the successor entity has a purpose identical to that of Bank
United Capital Trust;
o prior to the Merger Event, we have received an opinion of counsel
from a nationally recognized law firm stating that
1) the Merger Event does not adversely affect the rights of the
holders of the trust preferred securities or any successor
securities in any material way, other than with respect to
any dilution of the holders' interest in the new entity, and
2) following the Merger Event, neither Bank United Capital
Trust nor the successor entity will be required to register
as an investment company under the Investment Company Act;
and
o we guarantee the obligations of the successor entity under the
successor securities in the same manner as in the trust preferred
securities guarantee.
In addition, unless all of the holders of the trust preferred securities
and trust common securities approve otherwise, Bank United Capital Trust will
not consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it, if, in the opinion of a nationally recognized tax counsel
experienced in such matters, the transaction would cause Bank United Capital
Trust or the successor entity to be classified other than as a grantor trust for
U.S. federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATION. The holders of trust preferred
securities have no voting rights except as discussed under " -- Mergers,
Consolidations or Amalgamations of Bank United Capital Trust" and
"Guarantees -- Amendments and Assignment," and as otherwise required by law
and the amended declaration.
The amended declaration may be amended if approved by a majority of the
Regular Trustees of Bank United Capital Trust. However, if any proposed
amendment provides for, or the Regular Trustees otherwise propose to effect,
1) any action that would adversely affect the powers, preferences or
special rights of the trust securities, whether by way of
amendment to the amended declaration or otherwise, or
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2) the dissolution, winding-up or termination of Bank United Capital
Trust other than under the terms of its amended declaration,
then the holders of the trust preferred securities as a single class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will only be effective if approved by at least a majority in
liquidation amount of the trust preferred securities affected by the amendment
or proposal.
No amendment may be made to an amended declaration if that amendment would:
o cause Bank United Capital Trust to be characterized as other than
a grantor trust for U.S. federal income tax purposes;
o reduce or otherwise adversely affect the powers of the Property
Trustee; or
o cause Bank United Capital Trust to be deemed to be an "investment
company" which is required to be registered under the Investment
Company Act.
The holders of a majority of the total liquidation amount of the trust
preferred securities have the right to:
o direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee; or
o direct the exercise of any trust or power conferred upon the
Property Trustee under the amended declaration, including the
right to direct the Property Trustee, as the holder of the junior
subordinated debt securities, to
1) exercise the remedies available under the junior
subordinated indenture with respect to the junior
subordinated debt securities,
2) waive any event of default under the junior subordinated
indenture that is waivable, or
3) cancel an acceleration of the principal of the junior
subordinated debt securities.
However, if the junior subordinated indenture requires the consent of the
holders of a super-majority of the total principal amount of the junior
subordinated debt securities, then the Property Trustee must get approval of the
holders of a super-majority in liquidation amount of the trust preferred
securities.
In addition, before taking any of the foregoing actions, the Property
Trustee must obtain an opinion of counsel stating that, as a result of that
action, Bank United Capital Trust will continue to be classified as a grantor
trust for U.S. federal income tax purposes.
The Property Trustee will notify all trust preferred securities holders of
any notice received from the Indenture Trustee with respect to the junior
subordinated debt securities held by Bank United Capital Trust.
As described in the amended declaration, the Property Trustee may hold a
meeting to have holders of trust preferred securities vote on a change or have
them approve a change by written consent.
If a vote by the holders of trust preferred securities is taken or a
consent is obtained, any trust preferred securities that are owned by us or any
of our affiliates will, for purposes of the vote or consent, be treated as if
they were not outstanding, which will have the following consequences:
o we and any of our affiliates will not be able to vote on or
consent to matters requiring the vote or consent of holders of
trust preferred securities; and
o any trust preferred securities owned by us or any of our
affiliates will not be counted in determining whether the
required percentage of votes or consents has been obtained.
INFORMATION CONCERNING THE PROPERTY TRUSTEE. For matters relating to
compliance with the Trust Indenture Act, the Property Trustee will have all of
the duties and responsibilities of an indenture trustee under the Trust
Indenture Act. The Property Trustee, other than during the occurrence and
continuance of a Declaration Event of Default, undertakes to perform only the
duties that are
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specifically described in the amended declaration and, upon a Declaration Event
of Default, must use the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers given it by the applicable amended declaration at the request of any
holder of trust preferred securities unless it is offered reasonable security or
indemnity against the costs, expenses and liabilities that it might incur.
However, the holders of the trust preferred securities will not be required to
offer such an indemnity where the holders, by exercising their voting rights,
direct the Property Trustee to take any action following a Declaration Event of
Default.
MISCELLANEOUS. The Regular Trustees are authorized and directed to conduct
the affairs of and to operate Bank United Capital Trust in a way that:
o will not cause it to be deemed to be an "investment company"
required to be registered under the Investment Company Act;
o will cause it to be classified as a grantor trust for U.S.
federal income tax purposes; and
o will cause the junior subordinated debt securities it holds to be
treated as our indebtedness for U.S. federal income tax purposes.
We and the Regular Trustees are authorized to take any action, so long as
it is consistent with applicable law or the certificate of trust or amended
declaration, that we and the Regular Trustees determine to be necessary or
desirable for those purposes.
Holders of trust preferred securities have no preemptive or similar rights.
Bank United Capital Trust may not borrow money, issue debt, execute
mortgages or pledge any of its assets.
GOVERNING LAW. The amended declaration and the related trust preferred
securities will be governed by and construed in accordance with the laws of the
State of Delaware.
GUARANTEES
We will execute a trust preferred securities guarantee, for the benefit of
the holders of trust preferred securities, at the time that Bank United Capital
Trust issues the trust preferred securities. The trust preferred securities
guarantee will be qualified as an indenture under the Trust Indenture Act. The
Bank of New York will act as the trustee (the "Guarantee Trustee") under the
trust preferred securities guarantee for the purposes of compliance with the
Trust Indenture Act. The terms of the trust preferred securities guarantee will
be those contained in the trust preferred securities guarantee and those made
part of the trust preferred securities guarantee by the Trust Indenture Act. The
following is a summary of the principal terms of the trust preferred securities
guarantee. This summary is not complete and is qualified in its entirety by
reference to the form of trust preferred securities guarantee, which is filed as
an exhibit to the registration statement of which this prospectus forms a part
or is incorporated by reference, and the Trust Indenture Act. The Guarantee
Trustee will hold the trust preferred securities guarantee for the benefit of
the holders of trust preferred securities.
We will irrevocably agree, as described in the trust preferred securities
guarantee, to pay in full, to the holders of the trust preferred securities
issued by Bank United Capital Trust, the trust preferred securities guarantee
payments, except to the extent previously paid, when and as due, regardless of
any defense, right of set-off or counterclaim which Bank United Capital Trust
may have or assert. The following payments, to the extent not paid by Bank
United Capital Trust, will be covered by the trust preferred securities
guarantee:
o any accrued and unpaid distributions required to be paid on the
trust preferred securities, to the extent that Bank United
Capital Trust has funds available to make the payment;
o the redemption price, to the extent that Bank United Capital
Trust has funds available to make the payment; and
o upon a voluntary or involuntary dissolution and liquidation of
Bank United Capital Trust, other than in connection with a
distribution of junior subordinated debt securities to
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holders of the trust preferred securities or the redemption of all
the trust preferred securities, the lesser of
1) the total of the liquidation amount specified in the
prospectus supplement for each trust preferred security plus
all accrued and unpaid distributions on the trust preferred
securities to the date of payment, to the extent Bank United
Capital Trust has funds available to make the payment, and
2) amount of assets of Bank United Capital Trust remaining
available for distribution to holders of its trust preferred
securities upon a dissolution and liquidation of the trust.
Our obligation to make a trust preferred securities guarantee payment may
be satisfied by directly paying the required amounts to the holders of the trust
preferred securities or by causing Bank United Capital Trust to pay the amounts
to the holders.
The trust preferred securities guarantee will be a guarantee on a
subordinated basis with respect to the trust preferred securities from the time
of issuance of the trust preferred securities, but will not apply to any payment
of distributions or redemption price, or to payments upon the dissolution,
winding-up or termination of Bank United Capital Trust, except to the extent
Bank United Capital Trust has funds available therefor. If we do not make
interest payments on the junior subordinated debt securities, Bank United
Capital Trust will not pay distributions on the trust preferred securities and
will not have funds available therefor. See "-- Junior Subordinated Debt
Securities."
No single document executed by us relating to the issuance of trust
preferred securities will provide for our full, irrevocable and unconditional
guarantee of the trust preferred securities. It is our obligations under the
junior subordinated indenture, the trust preferred securities guarantee and
amended declaration taken together that have the effect of providing a full,
irrevocable and unconditional guarantee of the trust's obligations under its
trust preferred securities.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEE. Our obligations under
the trust preferred securities guarantee will rank junior in priority of payment
to all of our senior indebtedness. This means that we cannot make any payments
on the trust preferred securities guarantee if we default on a payment of senior
indebtedness and do not cure the default within the applicable grace period, or
if the senior indebtedness becomes immediately due because of a default and has
not yet been paid in full. In addition, our obligations under the trust
preferred securities guarantee will rank junior to all existing and future
liabilities of our subsidiaries.
The amended declaration will require that the holder of trust preferred
securities accept the subordination provisions and other terms of the trust
preferred securities guarantee. The trust preferred securities guarantee will
constitute a guarantee of payment and not of collection. In other words, the
holder of the guaranteed security may sue us, or seek other remedies, to enforce
its rights under the trust preferred securities guarantee without first suing
any other person or entity. A trust preferred securities guarantee will not be
discharged except by payment of the trust preferred securities guarantee
payments in full to the extent not previously paid or upon distribution of the
junior subordinated debt securities to the holders of trust preferred securities
under the amended declaration.
MATERIAL COVENANTS RELATED TO THE TRUST PREFERRED SECURITIES GUARANTEE. In
the trust preferred securities guarantee, we will covenant that, so long as any
trust preferred securities remain outstanding, if there is an event of default
under the trust preferred securities guarantee or the amended declaration:
o we will not make distributions related to our debt securities
that rank equally with or junior to the junior subordinated debt
securities, including any payment of interest, principal or
premium, or repayments, repurchases or redemptions; and
o we will not make distributions related to our capital stock,
including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments. We may, however, make
distributions in connection with any of the following:
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1) repurchases, redemptions or other acquisitions of shares of
our capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or
consultants,
2) an exchange or conversion of any class or series of our
capital stock for any other class or series of our capital
stock, or
3) the purchase of fractional interests in shares of our
capital stock under the conversion or exchange provisions of
such capital stock or the security being converted or
exchanged.
The trust preferred securities guarantee, however, will except from the above
any stock dividends paid by us where the dividend stock is the same stock as
that on which the dividend is being paid.
AMENDMENTS AND ASSIGNMENT. Except with respect to any changes which do not
adversely affect the rights of holders of trust preferred securities in any
material respect, in which case no consent of those holders will be required, a
trust preferred securities guarantee may only be amended with the prior approval
of the holders of at least a majority of the total liquidation amount of the
trust preferred securities, excluding any such trust preferred securities held
by us or any of our affiliates. A description of the requirements for obtaining
any approval is described under "Trust Preferred Securities -- Voting Rights;
Amendment of Declaration." All guarantees and agreements contained in the trust
preferred securities guarantee will be binding on our successors, assigns,
receivers, trustees and representatives and are for the benefit of the holders
of the applicable trust preferred securities.
TRUST PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT. An event of
default under the trust preferred securities guarantee will occur if we fail to
make any of our required payments or perform our obligations under the trust
preferred securities guarantee.
The holders of at least a majority of the total liquidation amount of the
trust preferred securities, excluding any trust preferred securities held by us
or any of our affiliates, will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee or to direct the exercise of any trust or power given to the Guarantee
Trustee under the trust preferred securities guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee under
the trust preferred securities guarantee, other than during the occurrence and
continuance of an event of default under the trust preferred securities
guarantee, will only perform the duties that are specifically described in such
trust preferred securities guarantee. After such a default, the Guarantee
Trustee will exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Guarantee Trustee is under no obligation to exercise any of its
powers as described in the trust preferred securities guarantee at the request
of any holder of covered trust preferred securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that it might
incur.
TERMINATION OF THE TRUST PREFERRED SECURITIES GUARANTEE. The trust
preferred securities guarantee will terminate once the trust preferred
securities are paid in full or upon distribution of the junior subordinated debt
securities to the holders of the trust preferred securities. The trust preferred
securities guarantee will continue to be effective or will be reinstated if at
any time any holder of trust preferred securities must restore payment of any
sums paid under the trust preferred securities or the trust preferred securities
guarantee.
GOVERNING LAW. The trust preferred securities guarantee will be governed
by and construed in accordance with the laws of the State of New York.
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and we to sell to the holders, a specified number
of shares of common stock at a future date or dates. The consideration per share
of common stock may be fixed at the time the stock purchase contracts are issued
or may be determined by reference to a specific formula described in the stock
purchase contracts. We may issue the stock purchase contracts separately or as a
part of stock
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purchase units consisting of a stock purchase contract and one or more shares of
our preferred stock or fractions thereof or a debt security or a debt obligation
of us or a third party, including a U.S. Treasury security. Our preferred stock
or our debt security or the debt obligation of a third party may serve as
collateral to secure the holders' obligations to purchase the shares of common
stock under the stock purchase contracts. The stock purchase contracts may
require us to make periodic payments to the holders of stock purchase contracts.
These payments may be unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a specified manner.
The applicable prospectus supplement will describe the specific terms of any
stock purchase contracts or stock purchase units.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE
AND THE JUNIOR SUBORDINATED NOTES HELD BY BANK UNITED CAPITAL TRUST
We will guarantee payments of distributions and redemption and liquidation
payments due on the trust preferred securities, to the extent the trust has
funds available for the payments, to the extent described under "Description of
Offered Securities -- Guarantees." No single document executed by us in
connection with the issuance of the trust preferred securities will provide for
our full, irrevocable and unconditional guarantee of the trust preferred
securities. It is only the combined operation of our obligations under the trust
preferred securities guarantee, the amended declaration and the junior
subordinated indenture that has the effect of providing a full, irrevocable and
unconditional guarantee of Bank United Capital Trust's obligations under the
trust preferred securities.
As long as we make payments of interest and other payments when due on the
junior subordinated debt securities held by Bank United Capital Trust, those
payments will be sufficient to cover the payment of distributions and redemption
and liquidation payments due on the trust preferred securities issued by Bank
United Capital Trust, primarily because:
o the total principal amount of the junior subordinated debt
securities will be equal to the sum of the total liquidation
amount of the trust securities;
o the interest rate and interest and other payment dates on the
junior subordinated debt securities will match the distribution
rate and distribution and other payment dates for the trust
preferred securities;
o we will pay for any and all costs, expenses and liabilities
of Bank United Capital Trust except its obligations under
its trust preferred securities; and
o each amended declaration provides that Bank United Capital
Trust will not engage in any activity that is not consistent
with the limited purposes of Bank United Capital Trust.
If and to the extent that we do not make payments on the junior
subordinated debt securities, Bank United Capital Trust will not have funds
available to make payments of distributions or other amounts due on its trust
preferred securities. In those circumstances, you will not be able to rely upon
the trust preferred securities guarantee for payment of these amounts. Instead,
you may directly sue us or seek other remedies to collect your proportionate
share of payments owed. If you sue us to collect payment, then we will assume
your rights as a holder of trust preferred securities under the amended
declaration to the extent we make a payment to you in any such legal action.
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SELLING STOCKHOLDERS
The selling stockholders are the general partners and some of the limited
partners of Hyperion Partners L.P., a Delaware limited partnership, and three
other entities with which an affiliate of Hyperion Partners has a fiduciary
relationship. The applicable prospectus supplement for any offering of Class A
common stock by selling stockholders will include the following information:
o the name of the selling stockholders;
o the number of shares held by each of the selling stockholders;
o the percentage of the class of shares held by each of the selling
stockholders; and
o the number of shares of Class A common stock offered by each of
the selling stockholders.
SELLING STOCKHOLDER LETTER AGREEMENT
The following summary of the material provisions of the letter agreement
that affects the selling stockholders is qualified in its entirety by reference
to the letter agreement that we filed as an exhibit to the registration
statement on Form S-1 (File No. 333-06229), which we filed with the Commission
on August 7, 1996 in connection with our IPO. Please review the exhibit for
further details not described in the summary in this section.
In connection with our IPO in August, 1996, some of the holders of our
common stock, including all of the selling stockholders with the exception of
the FDIC, entered into a letter agreement with us. This letter agreement
restricts the holders' ability to sell our common stock, other than the shares
sold in the IPO, for a specific period of time. Under the terms of the letter
agreement, each selling stockholder who retained shares of common stock
following the IPO was not permitted to sell such shares for (1) one year after
the IPO, if the stock was received in respect of general partnership interests
in Hyperion Partners, or (2) six months after the IPO, if the stock was received
in respect of limited partnership interests in Hyperion Partners (although a
regulated New Jersey insurance company was permitted to sell shares in a private
off-market transaction subject to Rule 144 limits and reasonable representations
requested by the underwriters). Each holder of 5% or more of our common stock
was permitted to sell up to 45% of such holder's shares of common stock in the
IPO, except for certain affiliates of Lehman Brothers Inc., which were
prohibited from selling any shares until August 8, 1998. Any other selling
stockholder was permitted to sell up to 16% of its shares in the IPO. Each
selling stockholder acknowledged that, except for shares that could have been
sold under the IPO but were not sold at the election of a 5% stockholder, no 5%
stockholder is permitted by our by-laws to acquire or transfer any shares of our
capital stock for three years following the IPO (or upon termination of the
letter agreement, if earlier) unless as of an earlier date our Board determines
that such acquisition or transfer would not be reasonably likely to have a
material adverse effect on our tax position.
At March 31, 1999, 8,205,778 shares of our common stock were still subject
to the restrictions of the letter agreement. The letter agreement was terminated
for 7,887,436 shares on June 4, 1999 and will terminate for the remaining
318,342 shares on July 28, 1999.
Under the letter agreement, we filed registration statements under the
Securities Act with respect to 19,520,596 shares of Class A common stock held by
the selling stockholders. We are obligated to take action to keep such
registration statements effective, subject to occasional periods of suspension
of effectiveness as necessary, until the first to occur of:
o the date on which all shares of common stock registered under the
registration statements have been sold;
o December 31, 1999; and
o the date on which such registration under the Securities Act is
no longer required to sell such shares without restriction.
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These registration statements, of which this prospectus forms a part, which
register 8,205,778 shares still restricted under the letter agreement and the
966,037 shares that have not been registered is being filed in order to register
the remaining common shares subject to our registration obligation under the
letter agreement.
PLAN OF DISTRIBUTION
We may sell Class A common stock, preferred stock, depositary shares,
junior subordinated debt securities, Guarantees, stock purchase contracts or
stock purchase units. Bank United Capital Trust may sell trust preferred
securities; and the selling stockholders may sell Class A common stock. All of
these securities may be offered in one or more of the following ways from time
to time:
o to underwriters for resale to the public or to investors;
o directly to investors; or
o through agents to the public or to investors.
The applicable prospectus supplements will contain the terms of the
offering of the securities, including the name or names of any underwriters or
agents, the initial public offering price of the securities and the proceeds to
us, Bank United Capital Trust, or the selling stockholders, as the case may be,
from the sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
the securities may be listed.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in a prospectus supplement, the obligations of
the underwriters to purchase any series of securities will be subject to certain
conditions and the underwriters will be obligated to purchase all the securities
of the series, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
us and/or Bank United Capital Trust and/or the selling stockholders to
indemnification by us and/or Bank United Capital Trust and/or the selling
stockholders against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the
underwriters or agents may be required to make in respect thereof. Underwriters
and agents may be customers of, engage in transactions with, or perform services
for us and our affiliates in the ordinary course of business.
Each series of offered securities will be a new issue of securities and
will have no established trading market other than the Class A common stock,
which is listed on the Nasdaq, Any Class A common stock sold under a prospectus
supplement will be listed on the Nasdaq, subject to official notice of issuance.
Any underwriters to whom securities are sold by us, by Bank United Capital Trust
or the selling stockholders for public offering and sale may make a market in
the securities, but those underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The securities may or
may not be listed on a national securities exchange.
We cannot assure you that we, Bank United Capital Trust or the selling
stockholders will offer or sell any securities under this prospectus.
Neither we nor Bank United Capital Trust will receive any proceeds from the
sales of shares of Class A common stock by the selling stockholders. We will,
however, bear certain expenses in connection with the registration of the
securities being offered under this prospectus by Bank United Capital Trust and
the selling stockholders, including all costs incident to the offering and sale
of the securities to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes.
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The selling stockholders, and any broker-dealer who acts in connection with
the sale of the offered securities may be deemed to be an "underwriter" as
that term is defined in the Securities Act, and any commissions received by them
and profit on any resale of the offered securities as principal may be deemed to
be underwriting discounts and commissions under the Securities Act.
We have not authorized anyone, including any salesman or broker, to give
oral or written information about this offering that is different from the
information included in this prospectus or that is not included in this
prospectus.
LEGAL MATTERS
Wachtell, Lipton, Rosen & Katz, New York, New York will pass upon the
validity of the Class A common stock, the preferred stock, the depositary
shares, the trust preferred securities, the junior subordinated debt securities,
the trust preferred securities guarantee, the stock purchase contracts, the
stock purchase units and certain related matters and certain U.S. federal income
tax matters for us, the selling stockholders and Bank United Capital Trust.
Simpson Thacher & Bartlett, New York, New York will pass upon certain legal
matters relating to the offered securities for the underwriters, as described in
the applicable prospectus supplement.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from Bank United Corp.'s Annual
Report on Form 10-K for the year ended September 30, 1998 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference in this prospectus, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended December 31, 1998 and March 31, 1999 which are incorporated herein by
reference, Deloitte & Touche have applied limited procedures in accordance with
professional standards for a review of such information. However, as stated in
their report included in Bank United Corp.'s Quarterly Report on Form 10-Q for
the quarters ended December 31, 1998 and March 31, 1999 and incorporated by
reference herein, they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
FORWARD-LOOKING INFORMATION
Statements and financial discussion and analysis contained in this
prospectus that are not historical facts are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve a number of risks and
uncertainties. The important factors that could cause actual results to differ
materially from the forward-looking statements include, without limitation:
INTEREST RATES AND ECONOMY
o changes in interest rates and economic conditions;
o changes in the levels of loan prepayments and the resulting
effects on the value of our loan and servicing portfolios and the
related hedging instruments;
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o changes in local economic and business conditions adversely
affecting our borrowers and their ability to repay their loans
according to their terms or impacting the value of the related
collateral; and
o changes in local economic and business conditions adversely
affecting our customers other than borrowers and their ability to
transact profitable business with us.
COMPETITION AND PRODUCT AVAILABILITY
o Increased competition for deposits and loans adversely affecting
rates and terms;
o changes in availability of loans originated by other financial
institutions or our ability to purchase such loans on favorable
terms;
o changes in availability of single family servicing rights in the
marketplace and our ability to purchase such assets on favorable
terms; and
o various strategic alternatives that we consider from time to
time, including acquisitions of other depository institutions,
their assets or their liabilities on terms favorable to us, and
our successful integration of any such acquisitions.
CHANGE IN OUR ASSET MIX
o Increased credit risk in our assets and increased operating risk
caused by an increase in commercial and consumer loans and a
decrease in single family mortgage loans as a percentage of the
total loan portfolio.
LIQUIDITY AND CAPITAL
o Changes in the availability of funds resulting in increased costs
or reduced liquidity;
o changes in our ability to pay dividends on our common stock; and
o increased asset levels and changes in the composition of assets
and the resulting impact on the Bank's capital levels and
regulatory capital ratios.
SYSTEMS
o Our ability to acquire, operate and maintain cost effective and
efficient systems; and
o our ability to complete our project to assess and resolve any
Year 2000 problems on time.
PERSONNEL
o The loss of senior management or operating personnel and the
potential inability to hire qualified personnel at reasonable
compensation levels.
REGULATORY, COMPLIANCE AND LEGAL
o Changes in applicable statutes and government regulations or
their interpretations;
o claims of our noncompliance with statutory and regulatory
requirements;
o claims with respect to representations and warranties made by us
to purchasers and insurers of mortgage loans and to purchasers of
mortgage servicing rights; and
o changes in the status of litigation to which we are a party.
ABOUT THIS PROSPECTUS
This prospectus is part of registration statements that we filed with the
Commission utilizing a "shelf" registration procedure. Under this shelf
procedure, we, the selling stockholders and Bank United Capital Trust may, from
time to time, sell any combination of the securities described in this
prospectus in one or more offerings up to a total offering price of $830
million.
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This prospectus provides you with a general description of the securities
that we, the selling stockholders or Bank United Capital Trust may offer. We
will provide a prospectus supplement that will contain specific information
about the terms of each offering of securities. The prospectus supplement may
also add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with the
additional information described under the heading "Where You Can Find More
Information" below.
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
We are not offering the securities in any state where the offer is not
permitted.
WHERE YOU CAN FIND MORE INFORMATION
The rules and regulations of the Commission allow us to omit some of the
information included in the registration statement from this prospectus. The
registration statement, including the attached exhibits and schedules, contains
additional relevant information about us and our securities.
In addition, we file reports, proxy statements and other information with
the Commission under the Securities Exchange Act of 1934. You may read and copy
this information at the following locations of the Commission:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2511
You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission also maintains an
Internet world wide web site that contains reports, proxy statements and other
information about issuers, like us, who file electronically with the Commission.
The address of that site is http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to the other information we have filed with the Commission. The
information that we incorporate by reference is considered to be part of this
prospectus, and later information that we file with the Commission will
automatically update and supersede the information we've included in this
prospectus. We incorporate by reference the documents listed below:
o Our Annual Report on Form 10-K for the year ended September 30,
1998.
o Our Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1998 and March 31, 1999.
o Our Current Reports on Form 8-K filed on March 24, 1999, April 2,
1999 and June 9, 1999, as amended by current report on Form 8-K/A
filed on June 23, 1999.
o The description of our Class A common stock contained in our Form
8-A dated July 12, 1996.
o Our Proxy Statement for the Annual Meeting of Stockholders dated
February 10, 1999.
We also incorporate by reference any future filings we will make with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this prospectus but before the end of the offering of the securities
described in this prospectus.
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You may request a free copy of these filings by writing or calling us at
the following address:
INVESTOR RELATIONS
BANK UNITED CORP.
3200 SOUTHWEST FREEWAY
SUITE 3100
HOUSTON, TX 77027
(713) 543-6926
This prospectus does not contain or incorporate by reference any separate
financial statements of Bank United Capital Trust. We do not believe that these
financial statements are material to prospective holders of the trust preferred
securities because:
o all of the voting securities of Bank United Capital Trust will be
owned, directly or indirectly, by us, and we are a reporting
company under the Exchange Act;
o Bank United Capital Trust has no independent operations but
exists for the sole purpose of issuing securities representing
undivided beneficial ownership interests in its assets and
investing these proceeds in the junior subordinated debt
securities issued by us; and
o the obligations of Bank United Capital Trust under the trust
preferred securities are guaranteed by us to the extent described
in this prospectus.
Bank United Capital Trust is not currently subject to the informational
reporting requirements of the Exchange Act. Bank United Capital Trust will
become subject to those requirements upon the effectiveness of the registration
statement of which this prospectus is a part, although we and Bank United
Capital Trust intend to seek and expect to receive exemptions from those
reporting requirements from the Commission.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts except the
Commission registration fee are estimated.
ITEM AMOUNT
- ------------------------------------- --------
Registration fee..................... $ 41,700
Blue Sky fees and expenses........... 5,000
Printing and engraving expenses...... 10,000
Legal fees and expenses.............. 20,000
Accounting fees and expenses......... 20,000
Transfer Agent and Registrar fees.... 10,000
Miscellaneous........................ 10,000
--------
Total........................... $116,700
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bank United Corp. is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware (the "DGCL") contains detailed
provisions on indemnification of directors and officers of a Delaware
corporation against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with certain litigation.
Bank United Corp.'s Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that a director of Bank United Corp.
will not be personally liable to Bank United Corp. or its stockholders for
monetary damages for breach of fiduciary duty as a director, except, if required
by the DGCL as amended from time to time, for liability (i) for any breach of
the director's duty of loyalty to Bank United Corp. or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the DGCL, which
concerns unlawful payments of dividends, stock purchases or redemptions, or (iv)
for any transaction from which the director derived an improper personal
benefit. Neither the amendment nor repeal of such provision will eliminate or
reduce the effect of such provision in respect of any matter occurring, or any
cause of action, suit or claim that, but for such provision, would accrue or
arise prior to such amendment or repeal.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of care.
The Certificate of Incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of Bank
United Corp. or is or was serving at the request of Bank United Corp. as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, will be
indemnified and held harmless by Bank United Corp. to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
Bank United Corp. to provide
II-1
<PAGE>
broader indemnification rights than said law permitted Bank United Corp. to
provide prior to such amendment), against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith. Such
right to indemnification includes the right to have Bank United Corp. pay the
expenses incurred in defending any such proceeding in advance of its final
disposition, subject to the provisions of the DGCL. Such rights are not
exclusive of any other right which any person may have or thereafter acquire
under any statute, provision of the Certificate of Incorporation, By-Laws,
agreement, vote of stockholders or disinterested directors or otherwise. No
repeal or modification of such provision will in any way diminish or adversely
affect the rights of any director, officer, employee or agent of Bank United
Corp. thereunder in respect of any occurrence or matter arising prior to any
such repeal or modification. The Certificate of Incorporation also specifically
authorizes the Registrant to maintain insurance and to grant similar
indemnification rights to employees or agents of the Registrant.
Article 4 of the Amended and Restated Declaration of Trust of Bank United
Capital Trust (the "Amended Declaration") provides for the indemnification by
Bank United Corp. of the Property Trustee and the Delaware Trustee. Article 9 of
the Amended Declaration provides for the indemnification of the Regular Trustee,
the Property Trustee and the Delaware Trustee, and their affiliates, by Bank
United Capital Trust.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS AND SCHEDULES
(a) EXHIBITS
The following Exhibits are filed herewith or incorporated herein by
reference:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
1.1* -- Form of Underwriting Agreement relating
to Class A common stock.
1.2* -- Form of Underwriting Agreement relating
to trust preferred securities.
1.3 -- Form of Underwriting Agreement relating
to Premium Income Equity Securities
1.4 -- Form of Underwriting Agreement relating
to Series A Preferred Stock.
3.1** -- Form of Restated Certificate of
Incorporation of Bank United Corp.,
as amended (incorporated by reference
to Exhibit 3.1 to Form S-1,
Registration No. 333-06229).
3.2** -- Form of By-Laws of Bank United Corp.
(incorporated by reference to Exhibit
3.2 to Form S-1, Registration No.
333-06229).
4.1** -- Form of Class A Common Stock
(incorporated by reference to Form
8-A filed July 15, 1996).
4.2 -- Form of Certificate Evidencing Corporate PIES
(included as Exhibit A to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.3 -- Form of Certificate Evidencing Treasury PIES
(included as Exhibit B to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.4 -- Form of certificate of designation with respect
to Series A Preferred Stock.
4.5 -- Form of certificate of designation with respect
to Series B Preferred Stock.
4.6* -- Form of Deposit Agreement.
4.7* -- Form of Depositary Receipt (included
in Exhibit 4.3).
4.8** -- Form of Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
4.9** -- Certificate of Trust of Bank United
Capital Trust.
4.10** -- Form of junior subordinated indenture
between Bank United Corp. and Bank of
New York, Indenture Trustee.
4.11** -- Form of trust preferred securities
guarantee between Bank United Corp.
and Bank of New York, Guarantee
Trustee.
4.12** -- Form of certificate of junior
subordinated debt securities
(included in Exhibit 4.7 above).
4.13** -- Form of certificate of trust
preferred securities of Bank United
Capital Trust (included in Exhibit
4.5 above).
4.14 -- Form of Purchase Contract Agreement
II-2
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
4.15 -- Form of Pledge Agreement
4.16 -- Form of Remarketing Agreement
5.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz.
5.4* -- Opinion of Richards, Layton & Finger,
special Delaware counsel, as to
legality of the securities to be
issued by Bank United Capital Trust.
8.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz as to certain federal income tax
matters.
12.1** -- Computation of ratio of earnings to
fixed charges and earnings to
combined fixed charges and preferred
dividends.
15.1** -- Letter from Deloitte & Touche LLP regarding
unaudited interim financial information.
23.1** -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 5.1).
23.5 -- Consent of Richards, Layton & Finger
(included in Exhibit 5.4).
23.6 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 8.1).
24.1** -- Power of Attorney (see page II-6 of the Form
S-3 filed July 27, 1999).
25.1** -- Form T-1 Statement of Eligibility of
Bank of New York, Delaware to act as
Property Trustee and Delaware Trustee
under the Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
25.2** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Indenture
Trustee under the junior subordinated
indenture.
25.3** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Guarantee
Trustee under the trust preferred
securities guarantee of Bank United
Capital Trust.
- ------------
* To be filed by amendment or by filing of a Form 8-K subsequently incorporated
by reference.
** Previously filed.
(b) FINANCIAL STATEMENTS AND SCHEDULES
Either not applicable or shown in the financial statements or notes
thereto.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement
(notwithstanding the foregoing, any increase or decrease in
the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
total offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement); and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be
deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by each Registrant pursuant to Rule
424(b)(1) or (4) or 497 (h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was
declared effective. For the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
(5) For purposes of determining any liability under the Securities Act,
each filing of the each Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted as to directors, officers and controlling persons of each of
the Registrants pursuant to the DGCL, the organizational documents of the
Registrants, indemnification agreements entered into between Registrants and
their officers, directors or trustees, or otherwise, each Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer, trustee or controlling person of the Registrants in
the successful defense of any action, suit, or proceeding) is asserted by such
director, officer, trustee or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the undersigned
Registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement on Form S-3 or
amendment thereto and has duly caused this Registration Statement or amendment
thereto to be signed on its behalf by the undersigned, thereunto duly
authorized, in Houston, Texas, on August 3, 1999.
BANK UNITED CAPITAL TRUST
(Registrant)
By:BANK UNITED CORP., as Sponsor
By: /s/ BARRY C. BURKHOLDER
Name: Barry C. Burkholder
Title: Chief Executive Officer
BANK UNITED CORP.
(Registrant)
By: /s/ ANTHONY J. NOCELLA
Name: Anthony J. Nocella
Title: Vice Chairman
II-5
<PAGE>
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement or amendment thereto has been signed by the following persons in the
capacities indicated on August 3, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------------- ------------------------------------------------------------
<S> <C>
/s/BARRY C. BURKHOLDER Principal Executive Officer; Director
Barry C. Burkholder
* Principal Financial and Accounting Officer; Director
Anthony J. Nocella
Director
Lewis S. Ranieri
* Director
Lawrence Chimerine
* Director
David M. Golush
* Director
Paul M. Horvitz
Director
Alan E. Master
Director
Salvatore A. Ranieri
Director
Scott A. Shay
* Director
Patricia A. Sloan
* Director
Michael S. Stevens
* Director
Kendrick R. Wilson III
</TABLE>
* The undersigned, by signing his name
hereto, does hereby sign this
registration statement on behalf of each
of the above-indicated directors and
officers of the registrant pursuant to a
Power of Attorney signed by such
directors and officers.
/s/ BARRY C. BURKHOLDER
-----------------------
Barry C. Burkholder
As Attorney-In-Fact
II-6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
1.1* -- Form of Underwriting Agreement relating
to Class A common stock.
1.2* -- Form of Underwriting Agreement relating
to trust preferred securities.
1.3 -- Form of Underwriting Agreement relating
to Premium Income Equity Securities
1.4 -- Form of Underwriting Agreement relating
to Series A Preferred Stock.
3.1** -- Form of Restated Certificate of
Incorporation of Bank United Corp.,
as amended (incorporated by reference
to Exhibit 3.1 to Form S-1,
Registration No. 333-06229).
3.2** -- Form of By-Laws of Bank United Corp.
(incorporated by reference to Exhibit
3.2 to Form S-1, Registration No.
333-06229).
4.1** -- Form of Class A Common Stock
(incorporated by reference to Form
8-A filed July 15, 1996).
4.2 -- Form of Certificate Evidencing Corporate PIES
(included as Exhibit A to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.3 -- Form of Certificate Evidencing Treasury PIES
(included as Exhibit B to the Form of Purchase
Contract Agreement filed as Exhibit 4.14).
4.4 -- Form of certificate of designation with respect
to Series A Preferred Stock.
4.5 -- Form of certificate of designation with respect
to Series B Preferred Stock.
4.6* -- Form of Deposit Agreement.
4.7* -- Form of Depositary Receipt (included
in Exhibit 4.3).
4.8** -- Form of Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
4.9** -- Certificate of Trust of Bank United
Capital Trust.
4.10** -- Form of junior subordinated indenture
between Bank United Corp. and Bank of
New York, Indenture Trustee.
4.11** -- Form of trust preferred securities
guarantee between Bank United Corp.
and Bank of New York, Guarantee
Trustee.
4.12** -- Form of certificate of junior
subordinated debt securities
(included in Exhibit 4.7 above).
4.13** -- Form of certificate of trust
preferred securities of Bank United
Capital Trust (included in Exhibit
4.5 above).
4.14 -- Form of Purchase Contract Agreement
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------
4.15 -- Form of Pledge Agreement
4.16 -- Form of Remarketing Agreement
5.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz.
5.4* -- Opinion of Richards, Layton & Finger,
special Delaware counsel, as to
legality of the securities to be
issued by Bank United Capital Trust.
8.1 -- Opinion of Wachtell, Lipton, Rosen &
Katz as to certain federal income tax
matters.
12.1** -- Computation of ratio of earnings to
fixed charges and earnings to
combined fixed charges and preferred
dividends.
15.1** -- Letter from Deloitte & Touche LLP regarding
unaudited interim financial information.
23.1** -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 5.1).
23.5 -- Consent of Richards, Layton & Finger
(included in Exhibit 5.4).
23.6 -- Consent of Wachtell, Lipton, Rosen &
Katz (included in Exhibit 8.1).
24.1** -- Power of Attorney (see page II-6 of the Form
S-3 filed July 27, 1999).
25.1** -- Form T-1 Statement of Eligibility of
Bank of New York, Delaware to act as
Property Trustee and Delaware Trustee
under the Amended and Restated
Declaration of Trust of Bank United
Capital Trust.
25.2** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Indenture
Trustee under the junior subordinated
indenture.
25.3** -- Form T-1 Statement of Eligibility of
Bank of New York to act as Guarantee
Trustee under the trust preferred
securities guarantee of Bank United
Capital Trust.
- ------------
* To be filed by amendment or by filing of a Form 8-K subsequently incorporated
by reference.
** Previously filed.
EXHIBIT 1.3
BANK UNITED CORP.
2,000,000 PREMIUM INCOME EQUITY SECURITIESSM ("PIES(SM)")*
CONSISTING OF 2,000,000 CORPORATE PIES
UNDERWRITING AGREEMENT
August , 1999
LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Bank United Corp., a Delaware corporation (the "Company"), confirms
its agreement with Lehman Brothers Inc. (the "Underwriter"), with respect to the
issue and sale by the Company and purchase by the Underwriter of 2,000,000
Premium Income Equity Securities ("PIES") (the "Firm PIES"). In addition, the
Company proposes to grant to the Underwriter an option to purchase up to an
additional 450,000, PIES on the terms and for the purposes set forth in Section
2 (the "Option PIES"). The Firm PIES and the Option PIES, if purchased, are
hereinafter collectively called the "PIES." Capitalized terms used herein
without definition shall be used as defined in the Final Prospectus (as
hereinafter defined).
Each PIES will initially consist of a unit (a "Corporate PIES")
comprised of (a) a stock purchase contract (a "Purchase Contract") under which
(i) the holder will purchase from the Company no later than [ ], 2002, for $50,
a number of shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock"), equal to the Settlement Rate as set forth in the Purchase
Contract Agreement (as hereinafter defined) and (ii) the Company will pay to the
holder contract adjustment payments and (b) a share of the Company's Series B
Preferred Stock, liquidation preference $50 per share (the "Preferred Stock").
In accordance with the terms of a Purchase Contract Agreement (the "Purchase
Contract Agreement") to be entered into between the Company and [ ], as Purchase
Contract Agent (the "Purchase Contract Agent"), the holders of the PIES will
pledge the Preferred Stock to [ ], as Collateral Agent (the "Collateral Agent"),
pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered into among
the Company, the Purchase Contract Agent, [ ], as Securities Intermediary (the
"Securities Intermediary"), and the Collateral Agent, to secure the holders'
obligations to purchase Common Stock under the Purchase Contracts.
This is to confirm the agreement concerning the purchase of the
PIES by the Underwriter.
- --------
* "Premium Income Equity Securities" and "PIES" are service marks owned
by Lehman Brothers Inc.
<PAGE>
2
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 333-75937)
and an amendment or amendments thereto with respect to the PIES have
(i) been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder,
(ii) been filed with the Commission under the Securities Act and
(iii) become effective under the Securities Act. The registration
statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies in all other material respects with such Rule. The
Company proposes to file with the Commission pursuant to Rule 424(b)
under the Securities Act ("Rule 424(b)") a supplement to the form of
prospectus included in the registration statement relating to the
initial offering of the PIES and the plan of distribution thereof
and has previously advised you of all further information (financial
and other) with respect to the Company to be set forth therein. The
term "Registration Statement" means the registration statement, as
amended at the date of this Agreement and as amended from time to
time hereafter, including the exhibits thereto, and all documents
incorporated therein by reference pursuant to Item 12 of Form S-3
(the "Incorporated Documents"), and such prospectus as then amended,
including the Incorporated Documents, is hereinafter referred to as
the "Basic Prospectus"; and such supplemented form of prospectus, in
the form in which it shall be filed with the Commission pursuant to
Rule 424(b) (including the Basic Prospectus as so supplemented), is
hereinafter called the "Final Prospectus". The Basic Prospectus, as
the same may be amended or supplemented from time to time,
including, without limitation, by any preliminary form of prospectus
supplement relating to the Corporate PIES, which has heretofore been
filed pursuant to Rule 424(b) or included in any amendment to the
registration statement prior to the effective date thereof is
hereinafter called the "Interim Prospectus". Any reference herein to
the Registration Statement, any Interim Prospectus or the Final
Prospectus shall be deemed to refer to and include the Incorporated
Documents which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the date of this
Agreement, the issue date of any Interim Prospectus or the issue
date of the Final Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Interim Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing
of any Incorporated Documents under the Exchange Act after the date
of this Agreement or the issue date of the Basic Prospectus, any
Interim Prospectus or the Final Prospectus, as the case may be, and
deemed to be incorporated therein by reference. Copies of the
Registration Statement (including any amendment or amendments to
such Registration Statement) have been delivered by the Company to
the Underwriter.
<PAGE>
3
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Interim
Prospectus or Final Prospectus complied or will comply when so filed
in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) each part
of the Registration Statement, when such part became effective, did
not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) any
Interim Prospectus complied and the Registration Statement and the
Final Prospectus comply, and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the Rules and Regulations and (iv) any Interim Prospectus
did not contain and the Final Prospectus does not contain and, as it
may be amended or supplemented, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; PROVIDED
THAT no representation and warranty is made as to information
contained in or omitted from the Registration Statement, any Interim
Prospectus or the Final Prospectus in reliance upon and in
conformity with written information concerning the Underwriter
furnished to the Company by the Underwriter specifically for
inclusion therein; and the Commission has not issued an order
preventing or suspending the use of the Registration Statement, any
Interim Prospectus or the Final Prospectus.
(c) The shares of Common Stock to be issued and sold by the
Company pursuant to the Purchase Contracts have been duly and
validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Purchase
Contracts, will be duly and validly issued, fully paid and
non-assessable and will not be subject to any preemptive rights of
any person.
(d) The Corporate PIES have been duly authorized by the
Company, and when duly executed by the Company (assuming due
execution by the Purchase Contract Agent as attorney-in-fact for the
holders thereof and due authentication by the Purchase Contract
Agent) and delivered by the Company and upon payment therefor as set
forth herein, will be duly and validly issued and outstanding, and
will constitute valid and binding obligations of the Company
entitled to the benefits of the Purchase Contract Agreement and
enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law) (the "Bankruptcy
Exceptions") and an implied covenant of good faith and fair dealing.
(e) The shares of Preferred Stock have been duly authorized by
the Company and, when issued and delivered against payment therefor
as provided herein, will be
<PAGE>
4
duly and validly issued, fully paid and non-assessable and will
not be subject to any preemptive rights of any person.
(f) The Purchase Contract Agreement has been duly authorized
by the Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent) and delivered by the Company, will constitute a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as the enforcement
thereof may be limited by the Bankruptcy Exceptions and an implied
covenant of good faith and fair dealing.
(g) The Pledge Agreement has been duly authorized by the
Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent, the Securities Intermediary and the Collateral
Agent) and delivered by the Company, will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by the Bankruptcy Exceptions and an implied covenant of good
faith and fair dealing.
(h) This Agreement has been duly authorized, executed and
delivered by the Company; and the Remarketing Agreement (the
"Remarketing Agreement") to be entered into by the Company and
Lehman Brothers Inc., as Remarketing Agent, has been duly authorized
by the Company and, when executed and delivered by the Company, will
constitute a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions and
an implied covenant of good faith and fair dealing.
(i) The Corporate PIES, the Preferred Stock, the Common Stock
to be issued and sold pursuant to the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement, when the Corporate PIES are delivered
pursuant to this Agreement, will conform to the descriptions thereof
contained in the Final Prospectus.
(j) The accountants who certified the financial statements and
any supporting schedules thereto included or incorporated by
reference in the Registration Statement and the Final Prospectus,
and who delivered the letters referred to in Section 7(g) of this
Agreement, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(k) The consolidated financial statements included in the
Registration Statement and the Final Prospectus, together with the
related schedules and notes, present fairly in all material respects
the consolidated financial position of the Company and its
consolidated subsidiaries at the dates indicated and the results of
operations, changes in stockholders' equity and cash flows of the
Company and its
<PAGE>
5
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved, except as may be noted therein. The
selected financial data and the summary financial information
included in the Final Prospectus present fairly in all material
respects the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements
included in the Registration Statement. The information contained in
the Final Prospectus that constitutes "forward-looking statements"
within the meaning of Section 21E(i)(1) of the Exchange Act has been
prepared on the basis of the Company's best current judgments and
estimations as to future operating plans and results.
(l) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, except
as otherwise stated therein, (i) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
stockholders' equity, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material
Adverse Effect"), (ii) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (iii)
except for regular quarterly dividends on the Common Stock or on the
Series A Preferred Stock of Bank United (the "Bank") in amounts per
share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by the
Bank or the Company on any class of its capital stock.
(m) The Company, and each of its subsidiaries including the
Bank, has been duly organized and is validly existing as a
corporation or as a federal savings association, as the case may be,
in good standing under the laws of its jurisdiction and has all
necessary corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Final
Prospectus; the Company has all necessary corporate power and
authority to enter into and perform its obligations under this
Agreement, the Purchase Contract Agreement, the Pledge Agreement and
the Remarketing Agreement; and the Company and each of its
subsidiaries is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in
a Material Adverse Effect.
(n) (i) The Bank is the only "significant subsidiary" of the
Company (as such term is defined in Rule 1-02 of Regulation S-X).
The only subsidiaries of the Company other than the Bank are the
wholly-owned subsidiaries of the Bank listed on Schedule 1 hereto
which, considered in the aggregate as a single subsidiary, do not
constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X. The
<PAGE>
6
activities of all of the Bank's subsidiaries are permitted to
subsidiaries of a federally chartered savings bank, the deposits of
which are insured by the Savings Association Insurance Fund
("SAIF"), which is administered by the Federal Deposit Insurance
Corporation (the "FDIC").
(ii) All of the issued and outstanding capital stock of the
Bank and each subsidiary of the Bank has been duly authorized and
validly issued, is fully paid and non-assessable and, except as
otherwise disclosed in the Final Prospectus, and, other than the
Series A Preferred Stock, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any subsidiary was issued in
violation of the preemptive or similar rights of any securityholder
of such subsidiary.
(o) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Final Prospectus under the
caption "Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements or employee benefit plans
referred to in the Final Prospectus). The shares of issued and
outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.
(p) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any of the assets,
properties or operations of the Company or any of its subsidiaries
is subject (collectively, "Agreements and Instruments"), except for
such defaults that would not result in a Material Adverse Effect.
The execution, delivery and performance of this Agreement, the
Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in
connection with the transactions contemplated hereby or thereby and
the consummation of the transactions contemplated herein (including
the issuance and sale of the Corporate PIES, the Preferred Stock and
the Common Stock to be issued and sold pursuant to the Purchase
Contract and the use of the proceeds from the sale of the Corporate
PIES as described in the Final Prospectus under the caption "Use of
Proceeds" (collectively, the "Transactions") and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any assets,
properties or
<PAGE>
7
operations of the Company or any of its subsidiaries pursuant to,
any Agreements and Instruments (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not result
in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or (except for such violations that would
not result in a Material Adverse Effect) any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations. As
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the
right to require (whether with or without the giving of notice or
passage of time or both) the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its
subsidiaries.
(q) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors, which,
in either case, may reasonably be expected to result in a Material
Adverse Effect.
(r) There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company, the Bank,
or any of their respective subsidiaries, which individually or in
the aggregate for all such actions, suits, proceedings, inquiries or
investigations is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely
affect the consummation of the Transactions or the performance by
the Company of its obligations hereunder and thereunder; the
aggregate of all pending legal or governmental proceedings to which
the Company, the Bank, or any of their respective subsidiaries is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business of
the Company, the Bank, or any of their respective subsidiaries,
could not reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries is a party
to any written agreement or memorandum of understanding with, or
commitment letter or similar undertaking to, or subject to any order
or directive issued by, or a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of, any federal or state government agency or authority with
responsibility for the supervision or regulation of depository
institutions or their holding companies or the insurance of
deposits, which in any such case materially restricts the conduct of
its business or in any manner relates to its capital adequacy,
<PAGE>
8
its credit policies or its management, nor has the Company or any of
its subsidiaries been advised by any such regulatory authority that
it is contemplating issuing or requesting any such order, decree,
written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar undertakings or
board resolutions.
(s) There are no contracts or documents which are required to
be described in the Registration Statement, the Final Prospectus or
the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as
required.
(t) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect.
(u) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court
or governmental authority or agency, including, without limitation,
the OTS and the FDIC, is necessary or required for the due
authorization, execution and delivery by the Company of this
Agreement or for the performance by the Company of the Transactions,
except such as have been already obtained or will have been obtained
or made prior to the Closing Date (as defined below) or as may be
required under the Securities Act or the Rules and Regulations or
state securities laws.
(v) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company
and its subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the
<PAGE>
9
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse
Effect.
(w) The Company and its subsidiaries have good and marketable
title to all real, tangible and intangible property reflected in the
most recent balance sheet included in the Final Prospectus as owned
by the Company and its subsidiaries and good title to all other
properties reflected in the most recent balance sheet included in
the Final Prospectus as owned by them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (i) are
described in the Final Prospectus or (ii) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property
by the Company or any of its subsidiaries; or, with respect to any
such real property, render title unmarketable as to a material part
thereof and all of the leases and subleases material to the business
of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds
properties described in the Final Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease
or sublease.
(x) The PIES, upon issuance, will be excluded or exempted
under, or beyond the purview of, the Commodity Exchange Act, as
amended, and the rules and regulations of the Commodity Futures
Trading Commission under the Commodity Exchange Act.
(y) The Company is not, and upon the issuance and sale of the
PIES as herein contemplated and the application of the net proceeds
therefrom as described in the Final Prospectus will not be, an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act").
(z) Except as described in the Final Prospectus, and except as
would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof including any
judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous
Materials") or to the
<PAGE>
10
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending, or to the
knowledge of the Company, or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) to the knowledge of the Company, there are no
events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(aa) Except as described in the Registration Statement or as
set forth in any document or agreement described in the Registration
Statement as containing such rights, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company or the Bank, under the Securities Act or
otherwise.
(bb) Each of the Company and the Bank maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect
to any differences.
(cc) To the knowledge of the Company, neither the Company, the
Bank nor any employee or agent of the Company or the Bank has made
any payment of funds of the Company or the Bank or received or
retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character
required to be disclosed in the Final Prospectus.
(dd) Each of the Company and the Bank has filed all tax
returns required to be filed, which returns are complete and correct
in all material respects, and each of the Company and the Bank is
not in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto.
(ee) In the event the Company shall become either directly or
indirectly a bank holding company for purposes of the Bank Holding
Company Act of 1956, as amended (the "BHC Act") and the rules and
regulations of the Board of Governors of the Federal Reserve System
thereunder (the "BHC Rules"), the current activities
<PAGE>
11
of the Company and its subsidiaries (as defined in the BHC Rules)
would be activities permissible for a bank holding company under the
BHC Act and the BHC Rules.
(ff) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the PIES.
(gg) The Company has satisfied the conditions for use of Form
S-3, as set forth in the General Instructions thereto.
2. PURCHASE OF THE PIES BY THE UNDERWRITER. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,000,000 Firm PIES to
the Underwriter and the Underwriter agrees to purchase 2,000,000 Firm PIES.
In addition, the Company grants to the Underwriter an option to
purchase up to 450,000 Option PIES. Such option is granted solely for the
purpose of covering over-allotments in the sale of the Firm PIES and is
exercisable as provided in Section 4 hereof.
The price of both the Firm PIES and any Option PIES shall be $[ ]
per PIES.
The Company shall not be obligated to deliver any of the PIES to be
delivered on the First Delivery Date (as hereinafter defined) or the Second
Delivery Date (as hereinafter defined), as the case may be, except upon payment
for all the PIES to be purchased on such Delivery Date as provided herein.
3. OFFERING OF PIES BY THE UNDERWRITER. The Underwriter proposes to
offer the Firm PIES for sale upon the terms and conditions set forth in the
Final Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE PIES. Delivery of and payment for
the PIES shall be made at the office of Simpson Thacher & Bartlett at 425
Lexington Avenue, New York, New York, at 8:30 A.M., New York City time, on the
third full business day following the date of this Agreement (unless the sale of
the PIES hereunder has been priced after 4:30 p.m. Eastern time on the date of
this Agreement, in which case the fourth full business day following the date of
this Agreement) or at such other date or place as shall be determined by
agreement between the Underwriter and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company, through the facilities of The Depository Trust Company ("DTC"),
shall deliver or cause to be delivered a securities entitlement with respect to
the Firm PIES to the Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer of same-day funds to a bank
account designated by the Company. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of the Underwriter hereunder. Upon delivery, the Firm PIES
shall be registered in the name of Cede & Co., as nominee for DTC.
<PAGE>
12
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Underwriter. Such notice shall set forth the
aggregate number of Option PIES as to which the option is being exercised, the
names in which the Option PIES are to be registered, the denominations in which
the Option PIES are to be issued and the date and time, as determined by the
Underwriter, when the Option PIES are to be delivered; PROVIDED, HOWEVER, that
this date and time shall not be earlier than the First Delivery Date nor earlier
than the second business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which the
option shall have been exercised. The date and time the Option PIES are
delivered are sometimes referred to as the "Second Delivery Date" and the First
Delivery Date and the Second Delivery Date are sometimes each referred to as a
"Delivery Date".
Delivery of and payment for the Option PIES shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Underwriter and the Company) at 8:30 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company, through the facilities
of DTC, shall deliver or cause to be delivered a securities entitlement with
respect to the Option PIES to the Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer of same-day funds to
a bank account designated by the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of the Underwriter hereunder. Upon delivery, the
Option PIES shall be registered in the name of Cede & Co., as nominee of DTC.
The Preferred Stock underlying the PIES will be pledged with the
Collateral Agent to secure the holders' obligations to purchase Common Stock
under the Purchase Contracts. Such pledge shall be effected by the transfer to
the Securities Intermediary of the Preferred Stock to be pledged to the
Collateral Agent in accordance with the Pledge Agreement.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Final Prospectus in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City
time, on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or the Final Prospectus
except as permitted herein; to advise the Underwriter, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or
any supplement to the Final Prospectus or any amended Final
Prospectus has been filed and to furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Final Prospectus and for
so long as the delivery of a prospectus is required in connection
with the offering or sale of the PIES; to advise the Underwriter,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or
<PAGE>
13
suspending the use of the Final Prospectus, of the suspension of the
qualification of the PIES for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Final Prospectus
or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
the Final Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal.
(b) To furnish promptly to the Underwriter and to counsel for
the Underwriter a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
(c) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Remarketing Agreement) and,
(ii) the Final Prospectus (not later than 10:00 A.M., New York City
time, of the day following the execution and delivery of this
Agreement) and any amended or supplemented Final Prospectus (not
later than 10:00 A.M., New York City time, on the day following the
date of such amendment or supplement) and (iii) any document
incorporated by reference in any Interim Prospectus or Final
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the date hereof in
connection with the offering or sale of the PIES (or any other
securities relating thereto) and if at such time any event shall
have occurred as a result of which the Final Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when the Final Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Final Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Final Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Underwriter and,
upon its request, to prepare and to file such amendment, supplement
or document, to cause any amendment of the Registration Statement
containing an amended Final Prospectus to be made effective as soon
as possible and to prepare and furnish without charge to the
Underwriter and to any dealer in securities as many copies as the
Underwriter may from time to time reasonably request of an amended
or supplemented Final Prospectus which will correct such statement
or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Final Prospectus or any supplement to
the Final Prospectus that may, in the judgment of the Company or the
Underwriter, be required by the Securities Act or requested by the
Commission.
<PAGE>
14
(e) Prior to filing with the Commission any amendment to the
Registration Statements or supplement to the Final Prospectus,
including any document incorporated by reference in the Final
Prospectus, to furnish a copy thereof to the Underwriter and counsel
for the Underwriter and obtain the consent of the Underwriter to the
filing.
(f) Timely file such reports pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as are
necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the Securities Act.
(g) For a period of five years following the effective date of
the Registration Statement, to furnish to the Underwriter copies of
all materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished by
the Company to the principal national securities exchange upon which
the Company's common stock or the PIES may be listed pursuant to
requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder.
(h) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify the Preferred Stock,
the Purchase Contracts, the Common Stock and the Corporate PIES for
offering and sale under the securities laws of such jurisdictions as
the Underwriter may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Preferred Stock, the Purchase Contracts, the
Common Stock and the Corporate PIES; provided that in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction.
(i) [lockup language to come]
(j) To use its best efforts to complete the listing of the
Corporate PIES and the Common Stock to be issued and sold pursuant
to the Purchase Contracts on the New York Stock Exchange, Inc.,
subject only to official notice of issuance and evidence of
satisfactory distribution.
(k) To use the net proceeds received by it from the sale of
the PIES pursuant to this Agreement in the manner specified in the
Final Prospectus under the caption "Use of Proceeds."
6. EXPENSES. The Company agrees to pay (a) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the PIES under the Securities Act and all other expenses in
connection with the preparation, printing and filing of the
<PAGE>
15
Registration Statement, any Interim Prospectus and the Final Prospectus and
amendments and supplements thereto; (b) the costs incident to the authorization,
issuance, sale and delivery of the Preferred Stock, Purchase Contracts, Common
Stock to be issued and sold pursuant to the Purchase Contracts and PIES and any
taxes payable in connection therewith; (c) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (d) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), any
Interim Prospectus, the Final Prospectus and any amendment or supplement to any
such prospectus or any document incorporated by reference therein, all as
provided in this Agreement; (e) the costs of reproducing and distributing this
Agreement and any other related documents in delivery of the PIES; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Preferred Stock, Purchase Contracts, Common Stock and PIES under the securities
laws of the several jurisdictions as provided in Section 5(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriter ); (h) the filing fees and any expenses
of legal counsel incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the PIES; (i) any fees
charged by securities rating services for rating the PIES (or any related
security); (j) the fees and expenses of the Purchase Contract Agent, the
Collateral Agent, the Securities Intermediary and their respective counsel; (k)
any transfer taxes payable in connection with the sale of the PIES to the
Underwriter; and (l) all other costs and expenses incident to the performance of
the obligations of the Company under this Agreement; PROVIDED that, except as
provided in this Section 6, the Underwriter shall pay its own costs and
expenses, including the costs and expenses of its counsel, any transfer taxes on
the PIES which it may sell and the expenses of advertising any offering of the
PIES made by the Underwriter.
7. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional terms and conditions:
(a) As of each Delivery Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Securities Act, and no proceedings for that purpose shall have been
instituted or be pending or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with. The Final Prospectus shall have been filed with the
Commission in accordance with Section 5(a) hereof.
(b) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Wachtell, Lipton,
Rosen & Katz, counsel for the Company, in form and substance satisfactory
to counsel for the Underwriter to the effect set forth in Exhibit A
hereto.
<PAGE>
16
(c) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Jonathon K. Heffron,
Esq., General Counsel for the Company, in form and substance satisfactory
to counsel for the Underwriter, to the effect set forth in Exhibit B
hereto.
(d) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Simpson Thacher &
Bartlett, counsel for the Underwriter, with respect to the Registration
Statement, Final Prospectus, the validity of the Preferred Stock, Purchase
Contract, Common Stock to be issued pursuant to the Purchase Contracts and
other related matters as the Underwriter may reasonably request.
(e) [ ] shall have furnished to the Underwriter its written opinion,
as counsel to [ ], as Purchase Contract Agent, dated such Delivery Date,
in form and substance satisfactory to counsel for the
Underwriter, to the effect that:
(i) The Purchase Contract Agent is duly incorporated as a [ ]
banking corporation with all necessary power and authority to
execute, deliver and perform its obligations under the Purchase
Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the PIES, have
been duly authorized by all necessary corporate action on the part
of the Purchase Contract Agent. The Purchase Contract Agreement and
the Pledge Agreement have been duly executed and delivered by the
Purchase Contract Agent, and constitute the valid and binding
agreements of the Purchase Contract Agent, enforceable against the
Purchase Contract Agent in accordance with their terms, except as
the enforcement thereof may be limited by the Bankruptcy Exceptions
and an implied covenant of good faith and fair dealing.
(iii) The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent does not conflict with or constitute a breach of the charter
or by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or registration
with or notice to, any state or federal governmental authority or
agency is required for the execution, delivery or performance by the
Purchase Contract Agent of the Purchase Contract Agreement and the
Pledge Agreement.
(f) The Underwriter shall not have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Final Prospectus or any amendment or supplement thereto contains
any untrue statement of a fact which, in the opinion of Simpson Thacher &
Bartlett, counsel for the Underwriter, is material or omits to
<PAGE>
17
state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(g) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Remarketing Agreement, the
Purchase Contracts, the Common Stock to be issues and sold pursuant to the
Purchase Contracts, the Registration Statement and the Final Prospectus,
and all other legal matters relating to this Agreement and the
transactions contemplated hereby, shall be reasonably satisfactory in all
material respects to counsel for the Underwriter, and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(h) At the time of execution of this Agreement, the Underwriter
shall have received letters from each of Deloitte & Touche LLP and KPMG
Peat Marwick LLP, in form and substance satisfactory to the Underwriter,
addressed to the Underwriter and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Final
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(i) With respect to the letters of Deloitte & Touche LLP and of KPMG
Peat Marwick LLP referred to in the preceding paragraph and delivered to
the Underwriter concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the Underwriter
letters (the "bring-down letters") of such accountants, addressed to the
Underwriter and dated as of such Delivery Date confirming in all material
respects the conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Underwriter a
certificate, dated such Delivery Date, of its Chairman of the Board or its
President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of such Delivery Date; the Company has
complied with all its agreements contained herein; and the conditions set
forth in Section 7(a) have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Final Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the
<PAGE>
18
Prospectus or (B) since such date there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Final
Prospectus; and
(iii) They have carefully examined the Registration Statement and
the Final Prospectus and, in their opinion (A) the Registration Statement
and the Final Prospectus, as of such Delivery Date, did not include any
untrue statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the date of this Agreement, no event
has occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Final Prospectus.
(k) On each Delivery Date, counsel for the Underwriter shall have
been furnished with such documents and opinions as they may require for
the purpose of enabling them to pass upon the issuance and sale of the
PIES as herein contemplated, or other legal matters incident to the
authorization, form and validity of this Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Remarketing Agreement, the Purchase
Contracts, the Common Stock to be issued and sold pursuant to the Purchase
Contracts, the Registration Statement, any Interim Prospectus and the
Final Prospectus or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained, and all proceedings taken by the Company in
connection with the issuance and sale of the PIES as herein contemplated
shall be satisfactory in form and substance to the Underwriter and counsel
for the Underwriter.
(l) There shall not have been, since the date hereof or since the
respective dates as of which information is given in the Final Prospectus,
any material adverse change in the condition, financial or otherwise, or
in the consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business.
(m) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's or
any significant subsidiary's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's or any significant
subsidiary's debt securities or preferred stock.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such
<PAGE>
19
market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the public offering or
delivery of the PIES on the terms and in the manner contemplated in the
Final Prospectus.
(o) The New York Stock Exchange, Inc. shall have approved the
Corporate PIES for listing, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriter.
8. INDEMNIFICATION AND CONTRIBUTION
(a) The Company shall indemnify and hold harmless the Underwriter,
its officers and employees and each person, if any, who controls the
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the PIES), to which
the Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement, any Interim Prospectus or the
Final Prospectus, or in any amendment or supplement thereto, or (B) in any
blue sky application or other document prepared or executed by the Company
(or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the PIES under
the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (ii) the omission or alleged omission to state in the
Registration Statement, any Interim Prospectus or the Final Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse the Underwriter and
each such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by the Underwriter,
officer, employee or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER, that
the Company shall not be liable under this Section 8(a) in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, any Interim Prospectus or the Final Prospectus,
<PAGE>
20
or in any such amendment or supplement, or in any Blue Sky Application in
reliance upon and in conformity with written information concerning the
Underwriter furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein. The foregoing indemnity agreement is
in addition to any liability which the Company may otherwise have to the
Underwriter or to any officer, employee or controlling person of the
Underwriter.
(b) The Underwriter shall indemnify and hold harmless the Company,
its officers and employees, each of its directors and each person, if any,
who controls the Company within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which, the Company or any such director,
officer or controlling person may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Registration
Statement, any Interim Prospectus or the Final Prospectus, or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in the Registration
Statement, any Interim Prospectus or the Final Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning the Underwriter furnished to the Company by or on
behalf of the Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which the
Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that the Underwriter shall have the right to employ counsel to
represent jointly the Underwriter and its officers, employees
<PAGE>
21
and controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriter
against the Company under this Section 8 if, in the reasonable judgment of
the Underwriter, it is advisable for the Underwriter and its officers,
employees and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such separate counsel
shall be paid by the Company. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the written consent of the
indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party under Section 8(a) or 8(b), as the case may be, in
respect of any loss, claim damage or liability or any action in respect
thereof, referred to therein, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof referred to in Section 8(a) or
8(b), as the case may be, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriter on the other from the offering of the PIES or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other with respect
to the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriter on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the PIES purchased under this Agreement
(before deducting expenses) received by the Company on the one hand, and
the total underwriting discounts and commissions received by the
Underwriter with respect to the PIES purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the
PIES under this Agreement, in each case as set forth on the cover of the
Final Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct
<PAGE>
22
or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contributions pursuant to
this Section 8(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to in this Section 8(d). The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d) the Underwriter shall
not be required to contribute any amount in excess of the amount by which
the total price at which the PIES underwritten by it and distributed to
the public was offered to the public exceeds the amount of any damages
which the Underwriter has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges that the
statements with respect to the public offering of the PIES set forth on
the cover page of and under the caption "Underwriting" in, the Final
Prospectus are correct and constitute the only information concerning the
Underwriter furnished in writing to the Company specifically for inclusion
in the Registration Statement and the Final Prospectus.
9. TERMINATION. The obligations of the Underwriter hereunder may be
terminated by the Underwriter by notice given to and received by the
Company prior to delivery of any payment for the Firm PIES if, prior to
that time, any of the events described in Sections 7(l), 7(m) or 7(n)
shall have occurred or if the Underwriter shall decline to purchase the
PIES for any reason permitted under this Agreement.
10. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 212-526-6588) with a copy, in the case of any
notice pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, Lehman Brothers Inc., Three World
Financial Center, 10th Floor, New York, New York 10285;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Jonathon K. Heffron,
Esq. (Fax: 713-543-6469);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
<PAGE>
23
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Company,
and their respective successors and assigns. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control the
Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriter contained in Section 8(b) of
this Agreement shall be deemed to be for the benefit of directors of the
Company and officers of the Company who have signed the Registration
Statement and any person controlling the Company within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to
in this Section 11, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.
12. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in
this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall survive the delivery of and payment for the PIES and
shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
13. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
16. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
<PAGE>
24
If the foregoing correctly sets forth the agreement between the
Company and the Underwriter, please indicate your acceptance in the space
provided for that
purpose below.
Very truly yours,
BANK UNITED CORP.
By: _______________________
Title:
Accepted:
LEHMAN BROTHERS INC.
By: _________________________
AUTHORIZED REPRESENTATIVE
<PAGE>
SCHEDULE 1
LIST OF SUBSIDIARIES
<PAGE>
Exhibit A
FORM OF OPINION OF
WACHTELL, LIPTON, ROSEN & KATZ
TO BE DELIVERED PURSUANT TO SECTION 7(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Final
Prospectus, and to enter into and perform its obligations under the Underwriting
Agreement. The activities of each of the Company's subsidiaries are permitted to
subsidiaries of a savings and loan holding company.
(iii) The Bank is the only "significant subsidiary" of the Company (as
such term is defined in Rule 1-02 of Regulation S-X). The only subsidiaries of
the Company other than the Bank are the wholly-owned subsidiaries of the Bank
listed on Exhibit _ to the Registration Statement which, considered in the
aggregate as a single subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X.
(iv) The Company has an authorized capitalization as set forth in the
Final Prospectus. The shares of issued and outstanding capital stock of the
Company, including the shares of Preferred Stock being delivered on such
Delivery Date , have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock of the
Company, including the shares of Preferred Stock being delivered on such
Delivery Date, was issued in violation of any preemptive or other similar rights
of any securityholder of the Company.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The unissued shares of Common Stock to be issued and sold by the
Company pursuant to the Purchase Contracts have been duly and validly authorized
and reserved for issuance and when issued and delivered in accordance with the
provisions of the Purchase Contracts, will be duly and validly issued, fully
paid and non-assessable.
(vii) The Corporate PIES have been duly authorized, executed and delivered
by the Company and (assuming due execution by the Purchase Contract Agent as
attorney-in-fact of the holders thereof and due authentication by the Purchase
Contract Agent) upon payment therefor as set forth herein, will be duly and
validly issued and outstanding, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Purchase Contract
Agreement and enforceable against the Company in accordance with their terms,
except as enforceability may be limited by the Bankruptcy Exceptions and an
implied covenant of good faith and fair dealing.
<PAGE>
(viii) The Purchase Contract Agreement and the Pledge Agreement have been
duly authorized, executed and delivered by the Company and (assuming due
execution and delivery by the Purchase Contract Agent and, in the case of the
Pledge Agreement, the Securities Intermediary and the Collateral Agent)
constitute valid and binding agreements of the Company enforceable against the
Company in accordance with their respective terms, except as the enforceability
thereof may be limited by the Bankruptcy Exceptions and an implied covenant of
good faith and fair dealing; PROVIDED, HOWEVER, that based on a review of
applicable case law, upon the occurrence of a Termination Event, Section
365(e)(1) of the Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) should
not substantively limit the provisions of Sections [3.15 and 5.8] of the
Purchase Contract Agreement and Section [5.4] of the Pledge Agreement that
require termination of the Purchase Contracts and release of the Collateral
Agent's security interest in the Preferred Stock or the Treasury Securities.
(ix) The Remarketing Agreement has been duly authorized, executed and
delivered by the Company.
(x) The provisions of the Pledge Agreement are effective to create, in
favor of the Collateral Agent for the benefit of the Company, a valid and
perfected security interest under the Uniform Commercial Code as in effect on
the date of such opinion in the State of New York (the "New York UCC") in the
Pledged Preferred Stock and Pledged Treasury Securities from time to time
credited to the Collateral Account in accordance with the Pledge Agreement. For
purposes of such counsel's opinion, capitalized terms used in this clause (x)
shall have the meanings ascribed to such terms in the Pledge Agreement.
(xi) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, (A) any shares of
Common Stock issuable pursuant to the Purchase Contracts or (B) the Preferred
Stock pursuant to the Company's charter, by-laws, the certificate of designation
relating to the Preferred Stock or any agreement or other instrument known to
such counsel.
(xii) The Registration Statement has been declared effective under the
Securities Act; the Final Prospectus was filed with the Commission pursuant to
Rule 424(b) in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(xiii) The Registration Statements, the Final Prospectus, and each
amendment or supplement to the Registration Statement and the Final Prospectus,
as of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted therefrom, as to
which we express no opinion) complied as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations; the
documents incorporated by reference in the Final Prospectus and any further
amendment or supplement to any such incorporated document made by the Company
prior to the Closing Date (other than the financial statements and related
schedules contained therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.
<PAGE>
(xiv) The statements contained in the Final Prospectus under the captions
(A) "Description of Offered Securities," in the Basic Prospectus and (B)
"Prospectus Supplement Summary-The Offering," "Description of the PIES,"
"Description of the Purchase Contracts," "Certain Provisions of the Purchase
Contracts, the Purchase Contract Agreement and the Pledge Agreement," and
"Description of the Preferred Stock" in the Prospectus Supplement insofar as
they purport to constitute summaries of certain terms of documents referred to
therein, constitute accurate summaries of the terms of such documents in all
material respects.
(xv) The statements set forth in the Final Prospectus under the caption
"United States Federal Income Tax Consequences" insofar as they purport to
constitute summaries of matters of United States federal tax laws and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects.
(xvi) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Final Prospectus that are not described
as required.
(xvii) Neither the Company, the Bank nor any of their respective
subsidiaries is in violation of its charter or by-laws and, to the best of our
knowledge, no default by the Company, the Bank or any of their respective
subsidiaries exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Final Prospectus or filed as an exhibit to the Registration Statement.
(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign including, without limitation, the OTS
and FDIC (other than under the Securities Act and the Rules and Regulations,
which have been obtained, or as may be required under the securities or blue sky
laws of the various states, as to which we express no opinion) is necessary or
required in connection with the due authorization, execution and delivery of the
Underwriting Agreement, the offering, issuance, sale or delivery of the PIES,
the performance of the Transactions, or the performance by the Company of its
obligations pursuant to the Underwriting Agreement, the Purchase Contract
Agreements, the Pledge Agreement, the Remarketing Agreement, the Purchase
Contracts, the Preferred Stock or the PIES.
(xix) The execution, delivery and performance of the Underwriting
Agreement, the Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement, and the consummation by the Company of the Transactions
contemplated thereby and in the Registration Statement have been duly authorized
by all necessary corporate action and do not and will not result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company. The issuance and sale of the PIES do not contravene the Commodity
Exchange Act or the regulations of the Commodity Futures Trading Commission.
(xx) To the best of our knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except as described in
<PAGE>
Registration Statement or as set forth in any agreement described therein as
containing such rights.
(xxi) The Company is not, and upon the sale of the PIES as contemplated in
the Underwriting Agreement and the application of the net proceeds therefrom as
described in the Final Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
1940 Act.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto (except for financial statements
and schedules and other financial data included therein or omitted therefrom, as
to which we make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Final
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), at the time the Final Prospectus
was issued, at the time any such amended or supplemented Final Prospectus was
issued or at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). All terms used but not defined in this
exhibit should have the meanings ascribed to them in the Underwriting Agreement
and should be defined accordingly in the form of opinion to be delivered.
<PAGE>
Exhibit B
FORM OF OPINION OF
JONATHON K. HEFFRON
GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 7(c)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Final
Prospectus, and to enter into and perform its obligations under the Underwriting
Agreement. The activities of each of the Company's subsidiaries are permitted to
subsidiaries of a savings and loan company.
(iii) The Bank is the only "significant subsidiary" of the Company (as
such term is defined in Rule 1-02 of Regulation S-X). The only subsidiaries of
the Company other than the Bank are the wholly-owned subsidiaries of the Bank
listed on Exhibit _ to the Registration Statement, which, considered in the
aggregate as a single subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X. The activities of all of the Bank's
subsidiaries are permitted to subsidiaries of a federally chartered savings
bank, the deposits of which are insured by the SAIF, which is administered by
the FDIC.
(iv) The Bank is a federally chartered stock savings bank, duly
incorporated and validly existing under the laws of the United States, and the
Bank's charter is in full force and effect. The Bank is a member of the Federal
Home Loan Bank of Dallas and has been duly issued a certificate stating that its
savings accounts are insured by the FDIC in accordance with applicable law, and
no proceedings for the termination or revocation of such membership or insurance
are pending or, to the best of my knowledge, threatened.
(v) The Bank has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Final Prospectus.
(vi) Each subsidiary of the Bank has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation and has the power and authority to own, lease and operate its
properties and to conduct its business as described in the Final Prospectus. The
activities described in the Final Prospectus of each of the Bank's subsidiaries
are permitted activities of subsidiaries of a federally chartered savings bank,
the deposits of which are insured by the SAIF, which is administered by the
FDIC.
(vii) The Company, the Bank and each subsidiary of the Company or the Bank
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(viii) All of the issued and outstanding capital stock of the Bank and
each subsidiary of the Bank has been duly authorized and validly issued, is
fully paid and non-assessable and, except as otherwise disclosed in the
Registration Statement, is owned by the Company, directly
<PAGE>
or through subsidiaries, to the best of my knowledge, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
subsidiary.
(ix) The Company has an authorized capitalization as set forth in the
Final Prospectus. The shares of issued and outstanding capital stock of the
Company, including the shares of Preferred Stock being delivered on such
Delivery Date , have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock of the
Company, including the shares of Preferred Stock being delivered on such
Delivery Date, was issued in violation of any preemptive or other similar rights
of any securityholder of the Company.
(x) There is not pending or, to my knowledge, threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or the Bank or any of
their respective subsidiaries is a party, or to which the property of the
Company or the Bank or any of their respective subsidiaries is subject, before
or brought by any court or governmental agency or body, domestic or foreign,
which might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the Transactions or the
performance by the Company of its obligations thereunder. The aggregate of all
pending legal or governmental proceedings to which the Company, the Bank, or any
of their respective subsidiaries is known by me to be a party or of which any of
their respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material Adverse
Effect. To the best of my knowledge, neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of understanding
with, or commitment letter or similar undertaking to, or subject to any order or
directive issued by, or a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of, any federal or
state government agency or authority with responsibility for the supervision or
regulation of depository institutions or their holding companies or the
insurance of deposits, which in any such case materially restricts the conduct
of its business or in any manner relates to its capital adequacy, its credit
policies or its management, nor has the Company or any of its subsidiaries been
advised by any such regulatory authority that it is contemplating issuing or
requesting any such order, decree, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
undertakings or board resolutions. No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Final Prospectus that are not described
as required.
(xiv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of my knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or
<PAGE>
filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xv) Neither the Company, the Bank nor any of their respective
subsidiaries is in violation of its charter or by-laws and no default by the
Company, the Bank or any of their respective subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Final Prospectus or filed as an exhibit to the
Registration Statement.
(xvi) The execution, delivery and performance of the Underwriting
Agreement, the Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement, and the consummation by the Company of the Transactions
contemplated thereby and in the Registration Statement has been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
l(p) of the Underwriting Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to me, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company, the Bank or any of their respective subsidiaries is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company, the Bank or any of their respective subsidiaries, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to me, of
any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Bank, or any of their respective
subsidiaries or any of their respective properties, assets or operations.
(xvii) There are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company or the Bank under the Securities Act,
except as described in Registration Statement or as set forth in any agreement
described therein as containing such rights.
(xviii) The Company, the Bank and each of its subsidiaries possess such
Governmental Licenses issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them; the Company, the Bank and each of its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company, the Bank nor any of their
respective subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
<PAGE>
(xix) The Company, the Bank and each of their respective subsidiaries have
good and marketable title to all real, tangible and intangible property
reflected in the most recent balance sheet included in the Final Prospectus as
owned by the Company, the Bank and its subsidiaries and good title to all other
properties reflected in the most recent balance sheet included in the Final
Prospectus as owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the Final Prospectus or (a) do not,
singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company, the Bank or any of their respective subsidiaries; or, with respect to
any such real property, render title unmarketable as to a material part thereof
and all of the leases and subleases material to the business of the Company, the
Bank and of their respective subsidiaries, considered as one enterprise, and
under which the Company, the Bank or any of their respective subsidiaries holds
properties described in the Final Prospectus, are in full force and effect, and
neither the Company, the Bank nor any of their respective subsidiaries has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company, the sank or any of their respective
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company, the Bank or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(xx) Except as described in the Registration Statement or except as would
not, singly or in the aggregate, result in a Material Adverse Effect, (A) the
Company, the Bank and each of their respective subsidiaries is not in violation
of any Environmental Laws, (B) the Company, the Bank and each of their
respective subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company, the Bank or any of their respective subsidiaries and (D) to the
knowledge of the Company there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, the sank or any
of their respective subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxi) In the event the Company shall become either directly or indirectly
a bank holding company for purposes of the BHC Act and the BHC Rules, the
current activities of the Company and its subsidiaries (as defined in the BHc
Rules) would be activities permissible for a bank holding company under the BHC
Act and the BHC Rules.
(xxii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign including, without limitation, the OTS
and FDIC is necessary or required by federal banking laws and regulations in
connection with the due authorization, execution and delivery of the
Underwriting Agreement, the offering, issuance, sale or delivery of the PIES,
the performance of the Transactions, or the performance by the Company of its
obligations pursuant to the Underwriting Agreement, the Purchase Contract
Agreements, the Pledge Agreement, the Remarketing Agreement, the Purchase
Contracts, the Preferred Stock or the PIES.
<PAGE>
Nothing has come to my attention that would lead me to believe that the
Registration Statement or any amendment thereto, including the information
included in any prospectus that was omitted from such Registration Statement at
the time it became effective but that is deemed to be part of such Registration
Statement at the time it became effective (except for financial statements and
schedules and other financial data included therein or omitted therefrom, as to
which I make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Final Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included therein or omitted therefrom, as to which I
make no statement), at the time the Final Prospectus was issued, at the time any
such amended or supplemented Final Prospectus was issued or at either Delivery
Date, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). All terms used but not defined in this
exhibit should have the meanings ascribed to them in the Underwriting Agreement
and should be defined accordingly in the form of opinion to be delivered.
EXHIBIT 1.4
2,000,000 SHARES
BANK UNITED CORP.
SERIES A PREFERRED STOCK
UNDERWRITING AGREEMENT
August ____, 1999
LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Bank United Corp., a Delaware corporation (the "Company") proposes
to sell an aggregate of 2,000,000 shares (the "Firm Stock") of the Company's
Series A preferred stock, liquidation preference $50 per share (the "Preferred
Stock"). In addition, the Company proposes to grant to Lehman Brothers Inc. (the
"Underwriter") an option to purchase up to an additional 300,000 shares of the
Preferred Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Stock, if purchased, are hereinafter
collectively called the "Stock." This is to confirm the agreement concerning the
purchase of the Stock from the Company by the Underwriter. Capitalized terms
used herein without definition shall be used as defined in the Final Prospectus
(as hereinafter defined).
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 333-75937), and
an amendment or amendments thereto, with respect to the Stock have (i)
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with
the Commission under the Securities Act and (iii) become effective under
the Securities Act. The registration statement, as amended at the date of
this Agreement, meets the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complies in all other material respects with
such Rule. The Company proposes to file with the Commission pursuant to
Rule 424(b) under the Securities Act ("Rule 424(b)") a supplement to the
form of prospectus included in the registration statement relating to the
initial offering of the Stock and the plan of distribution thereof and has
previously advised you of all further information (financial and other)
with respect to the Company to be set forth therein. The term
"Registration Statement" means the registration statement, as amended at
the date of this Agreement and as amended from time to time hereafter,
including the exhibits thereto, and all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 (the "Incorporated
<PAGE>
2
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in
which it shall be filed with the Commission pursuant to Rule 424(b)
(including the Basic Prospectus as so supplemented), is hereinafter called
the "Final Prospectus". The Basic Prospectus, as the same may be amended
or supplemented from time to time, including, without limitation, by any
preliminary form of prospectus supplement relating to the Stock, which has
heretofore been filed pursuant to Rule 424(b) or included in any amendment
to the registration statement prior to the effective date thereof is
hereinafter called the "Interim Prospectus". Any reference herein to the
Registration Statement, any Interim Prospectus or the Final Prospectus
shall be deemed to refer to and include the Incorporated Documents which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement, the issue date
of any Interim Prospectus or the issue date of the Final Prospectus, as
the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement,
any Interim Prospectus or the Final Prospectus shall be deemed to refer to
and include the filing of any Incorporated Documents under the Exchange
Act after the date of this Agreement or the issue date of the Basic
Prospectus, any Interim Prospectus or the Final Prospectus, as the case
may be, and deemed to be incorporated therein by reference. Copies of the
Registration Statement and the amendment or amendments to such
Registration Statement have been delivered by the Company to the
Underwriter.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Interim Prospectus or
Final Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations of
the Commission thereunder, (ii) each part of the Registration Statement,
when such part became effective, did not contain and each such part, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (iii) any Interim Prospectus complied and the Registration
Statement and the Final Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the Rules and Regulations and (iv) any Interim
Prospectus did not contain and the Final Prospectus does not contain and,
as it may be amended or supplemented, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they are made, not misleading; PROVIDED THAT no representation and
warranty is made as to information contained in or omitted from the
Registration Statement, any Interim Prospectus or the Final Prospectus in
reliance upon and in conformity with written information concerning the
Underwriter furnished to the Company by the Underwriter specifically for
inclusion therein; and the Commission has not issued an order preventing
or suspending the use of the Registration Statement, any Interim
Prospectus or the Final Prospectus.
(c) The accountants who certified the financial statements and any
supporting schedules thereto included or incorporated by reference in the
Registration Statement and the
<PAGE>
3
Final Prospectus, and who delivered the letter referred to in Section 7(g)
of this Agreement, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(d) The consolidated financial statements included in the
Registration Statement and the Final Prospectus, together with the related
schedules and notes, present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries at the dates indicated and the results of operations, changes
in stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved,
except as may be noted therein. The selected financial data and the
summary financial information included in the Final Prospectus present
fairly in all material respects the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The information
contained in the Final Prospectus that constitutes "forward-looking
statements" within the meaning of Section 21E(i)(1) of the Exchange Act
has been prepared on the basis of the Company's best current judgments and
estimations as to future operating plans and results.
(e) Since the respective dates as of which information is given in
the Registration Statement and the Final Prospectus, except as otherwise
stated therein, (i) there has been no material adverse change in the
condition, financial or otherwise, or in the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
(ii) there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (iii) except for regular quarterly
dividends on the common stock of the Company or on the Series A Preferred
Stock of Bank United (the "Bank") in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Bank or the Company on any class of its
capital stock.
(f) The Company and each of its subsidiaries, including the Bank,
has been duly organized and is validly existing as a corporation or as a
federal savings association, as the case may be, in good standing under
the laws of its jurisdiction and has all necessary corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Final Prospectus, the Company has all
necessary corporate power and authority to enter into and perform its
obligations under this Agreement; and the Company and each of its
subsidiaries is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not have a material adverse effect
on the consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect").
<PAGE>
4
(g) (i) The Bank is the only "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X). The only
subsidiaries of the Company other than the Bank are the wholly-owned
subsidiaries of the Bank listed on Schedule 1 hereto which, considered in
the aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X. The activities of
all of the Bank's subsidiaries are permitted to subsidiaries of a
federally chartered savings bank, the deposits of which are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by the
Federal Deposit Insurance Corporation (the "FDIC").
(ii) All of the issued and outstanding capital stock of the Bank
and each subsidiary of the Bank has been duly authorized and validly
issued, is fully paid and non-assessable and, except as otherwise
disclosed in the Final Prospectus, and[ other than the Series A Preferred
Stock of the Bank,] is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such subsidiary.
(h) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Final Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Final Prospectus). The shares of issued and outstanding capital stock have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) The Stock has been duly authorized by the Company and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and not subject to
the preemptive or other similar rights of any person; and the Stock
conforms to all statements relating thereto contained in the Final
Prospectus and such description conforms to the rights set forth in the
instruments defining the same.
(k) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the assets, properties or operations of the Company or
any of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary corporate
<PAGE>
5
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
assets, properties or operations of the Company or any of its subsidiaries
pursuant to, any Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or (except for such violations that would not
result in a Material Adverse Effect) any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require (whether with or without the giving of notice or passage of
time or both) the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.
(l) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent, and
the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(m) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any of its subsidiaries, which
individually or in the aggregate for all such actions, suits, proceedings,
inquiries or investigations is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
of its subsidiaries is a party or of which any of its property or assets
is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business of the
Company or any of its subsidiaries, could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of
understanding with, or commitment letter or similar undertaking to, or
subject to any order or directive issued by, or a recipient of any
extraordinary supervisory letter from, or has adopted any board
resolutions at the request of, any federal or state government agency or
authority with responsibility for the supervision or regulation of
depository institutions or their holding companies or the insurance of
deposits, which in any such case materially restricts the conduct of its
business or in any manner relates to its capital adequacy, its credit
policies or its management, nor has the Company or any of its subsidiaries
been advised by any such regulatory authority that it is contemplating
issuing or requesting any such order,
<PAGE>
6
decree, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar undertakings or board
resolutions.
(n) There are no contracts or documents which are required to be
described in the Registration Statement, the Final Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(o) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them, and neither the Company nor
any of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(p) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, including, without limitation, the Office of Thrift
Supervision (the "OTS") and the FDIC, is necessary or required for the
performance by the Company of its obligations hereunder in connection with
the offering or sale of the Stock hereunder, for the consummation of the
transactions contemplated hereby or for the other transactions described
in the Registration Statement, except such as have been already obtained
or will have been obtained or made prior to the Closing Date (as defined
below) or as may be required under the Securities Act or the Rules and
Regulations or state securities laws.
(q) The Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
<PAGE>
7
(r) The Company and its subsidiaries have good and marketable title
to all real, tangible and intangible property reflected in the most recent
balance sheet included in the Final Prospectus as owned by the Company and
its subsidiaries and good title to all other properties reflected in the
most recent balance sheet included in the Final Prospectus as owned by
them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (i) are described in the Final Prospectus or (ii) do not,
singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; or, with respect to
any such real property, render title unmarketable as to a material part
thereof and all of the leases and subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties described in
the Final Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any
such lease or sublease.
(s) The Company is not, and upon the sale of the Stock as
contemplated herein and the application of the net proceeds therefrom as
described in the Final Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the U.S. Investment Company Act of 1940, as amended (the "1940
Act").
(t) Except as described in the Final Prospectus and Registration
Statement or except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (ii) the Company and each
of its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or, to the
knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices
of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and
(iv) to the knowledge of the Company there are no events or circumstances
that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the
<PAGE>
8
Company or any of its subsidiaries relating to Hazardous Materials or
any Environmental
Laws.
(u) Except as described in the Registration Statement or as set
forth in any document or agreement described in the Registration Statement
as containing such rights, there are no persons with registration rights
or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company or the Bank,
under the Securities Act or otherwise.
(v) Each of the Company and the Bank maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) To the knowledge of the Company, neither the Company, the Bank
nor any employee or agent of the Company or the Bank has made any payment
of funds of the Company or the Bank or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the Final
Prospectus.
(x) Each of the Company and the Bank has filed all tax returns
required to be filed, which returns are complete and correct in all
material respects, and each of the Company and the Bank is not in default
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto.
(y) In the event the Company shall become either directly or
indirectly a bank holding company for purposes of the Bank Holding Company
Act of 1956, as amended (the "BHC Act") and the rules and regulations of
the Board of Governors of the Federal Reserve System thereunder (the "BHC
Rules"), the current activities of the Company and its subsidiaries (as
defined in the BHC Rules) would be activities permissible for a bank
holding company under the BHC Act and the BHC Rules.
(z) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the Stock.
(aa) The Company has satisfied the conditions for use of Form
S-3, as set forth in the General Instructions thereto.
2. PURCHASE OF THE STOCK BY THE UNDERWRITER. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company
<PAGE>
9
agrees to sell 2,000,000 shares of the Firm Stock to the Underwriter and the
Underwriter agrees to purchase 2,000,000 shares of the Firm Stock.
In addition, the Company grants to the Underwriter an option to
purchase up to _______ shares of Option Stock. Such option is granted solely for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof.
The price of both the Firm Stock and any Option Stock shall be
$_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date (as hereinafter defined) or the Second
Delivery Date (as hereinafter defined), as the case may be, except upon payment
for all the Stock to be purchased on such Delivery Date as provided herein.
3. OFFERING OF STOCK BY THE UNDERWRITER. The Underwriter proposes to
offer the Firm Stock for sale upon the terms and conditions set forth in the
Final Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Stock shall be made at the office of Simpson Thacher & Bartlett at
425 Lexington Avenue, New York, New York at 8:30 A.M., New York City time, on
the third full business day following the date of this Agreement (unless the
sale of the Stock hereunder has been priced after 4:30 P.M. Eastern time on the
date of this Agreement, in which case the fourth full business day following the
date of this Agreement) or at such other date or place as shall be determined by
agreement between the Underwriter and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company, through the facilities of The Depository Trust Company ("DTC"),
shall deliver, or cause to be delivered, a securities entitlement with respect
to the Firm Stock to the Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer of immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of the
Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in the
name of Cede & Co., as nominee for DTC.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Underwriter. Such notice shall set forth the
aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Underwriter, when the shares of Option Stock
are to be delivered; PROVIDED, HOWEVER, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
<PAGE>
10
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Underwriter and the Company) at 8:30 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company, through the facilities
of DTC, shall deliver or cause to be delivered a securities entitlement with
respect to the Option Stock to the Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in the name of Cede & Co., a nominee for DTC.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Final Prospectus in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than 10:00 A.M., New York City time, on the
second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the
Registration Statement or the Final Prospectus except as permitted herein;
to advise the Underwriter, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Final Prospectus or any
amended Final Prospectus has been filed and to furnish the Underwriter
with copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Final Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Stock; to advise the Underwriter, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of the Final Prospectus, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Final Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of the Final
Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to the Underwriter and to counsel for the
Underwriter a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement, the computation of the ratio of earnings to
fixed charges and the computation of per share earnings), (ii) the Final
Prospectus (not later than 10:00 A.M., New York City time, of the day
following the execution and delivery of
<PAGE>
11
this Agreement) and any amended or supplemented Final Prospectus (not
later than 10:00 A.M. New York City time, on the day following the date of
such amendment or supplement) and (iii) any document incorporated by
reference in the Final Prospectus (excluding exhibits thereto); and, if
the delivery of a prospectus is required at any time after the date hereof
in connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any event shall have
occurred as a result of which the Final Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
the Final Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Final Prospectus
or to file under the Exchange Act any document incorporated by reference
in the Final Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Underwriter and, upon its request, to prepare
and file such amendment, supplement or document, to cause any amendment of
the Registration Statement containing an amended Final Prospectus to be
made effective as soon as possible and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many copies
as the Underwriter may from time to time reasonably request of an amended
or supplemented Final Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Final Prospectus or any supplement to the
Final Prospectus that may, in the judgment of the Company or the
Underwriter, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Final Prospectus, including
any document incorporated by reference in the Final Prospectus, to furnish
a copy thereof to the Underwriter and counsel for the Underwriter and
obtain the consent of the Underwriter to the filing;
(f) Timely file such reports pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the Securities
Act;
(g) For a period of five years following the effective date of the
Registration Statement, to furnish to the Underwriter copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the Company
to the principal national securities exchange upon which the Company's
common stock may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify the Stock for offering and
sale under the securities laws of such
<PAGE>
12
jurisdictions as the Underwriter may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Stock; PROVIDED that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(i) For a period from the date of this Agreement to the later of (A)
the First Delivery Date and (B) the date on which selling restrictions
have terminated, not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) (i) any Preferred Stock, (ii)
any securities that are substantially similar to the Stock, or (iii) any
securities that are convertible into, or exchangeable or exercisable for,
any of the foregoing, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of the Stock or other Preferred
Stock or similar securities, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of the Stock or other
Preferred Stock or similar securities or other securities, in cash or
otherwise, in each case without the prior written consent of the
Underwriter, other than pursuant to this Agreement or the Underwriting
Agreement between the Company and Lehman Brothers Inc. relating to
2,000,000 Corporate Premium Income Equity Securities; and
(j) To use the net proceeds received by it from the sale of the
Stock pursuant to this Agreement in the manner specified in the Final
Prospectus under the caption "Use of Proceeds."
6. EXPENSES. The Company agrees to pay (a) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Stock under the Securities Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Interim Prospectus and the Final Prospectus and amendments and
supplements thereto; (b) the costs incident to the authorization, issuance, sale
and delivery of the Stock and any taxes payable in connection therewith; (c) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (d) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Interim Prospectus, the Final Prospectus and any amendment
or supplement to any such prospectus or any document incorporated by reference
therein, all as provided in this Agreement; (e) the costs of reproducing and
distributing this Agreement and any other related documents in delivery of the
Stock; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriter );
(h) the filing fees and any expenses of legal counsel incident to any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Stock; (i) any fees charged by securities rating services for
rating the Stock (or any related security); (j) transfer taxes payable in
connection with the sale of the Stock to the Underwriter; and (k) all other
<PAGE>
13
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; PROVIDED that, except as provided in this Section 6, the
Underwriter shall pay its own costs and expenses, including the costs and
expenses of its counsel, any transfer taxes on the Stock which it may sell and
the expenses of advertising any offering of the Stock made by the Underwriter.
7. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional terms and conditions:
(a) As of each Delivery Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Securities Act, and no proceedings for that purpose shall have been
instituted or be pending or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with. The Final Prospectus shall have been filed with the
Commission in accordance with Section 5(a) hereof.
(b) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Wachtell, Lipton,
Rosen & Katz, counsel for the Company, in form and substance satisfactory
to counsel for the Underwriter to the effect set forth in Exhibit A
hereto.
(c) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Jonathon K. Heffron,
Esq., General Counsel for the Company, in form and substance satisfactory
to counsel for the Underwriter, to the effect set forth in Exhibit B
hereto.
(d) On each Delivery Date, the Underwriter shall have received the
favorable opinion, dated as of such Delivery Date, of Simpson Thacher &
Bartlett, counsel for the Underwriter, with respect to the Registration
Statement, Final Prospectus and other related matters as the Underwriter
may reasonably request.
(e) The Underwriter shall not have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Final Prospectus or any amendment or supplement thereto contains
any untrue statement of a fact which, in the opinion of Simpson Thacher &
Bartlett, counsel for the Underwriter, is material or omits to state any
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(f) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Final Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby, shall be reasonably satisfactory in all material respects to
counsel for
<PAGE>
14
the Underwriter, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(g) At the time of execution of this Agreement, the Underwriter
shall have received letters from each of Deloitte & Touche LLP and KPMG
Peat Marwick LLP, in form and substance satisfactory to the Underwriter,
addressed to the Underwriter and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Final
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) With respect to the letters of Deloitte & Touche LLP and of KPMG
Peat Marwick LLP referred to in the preceding paragraph and delivered to
the Underwriter concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the Underwriter
letters (the "bring-down letters") of such accountants, addressed to the
Underwriter and dated as of such Delivery Date confirming in all material
respects the conclusions and findings set forth in the initial letters.
(i) The Company shall have furnished to the Underwriter a
certificate, dated such Delivery Date, of its Chairman of the Board or its
President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company has complied with all its agreements contained herein;
and the conditions set forth in Section 7(a) have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Final Prospectus any
loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (B)
since such date there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Final Prospectus; and
<PAGE>
15
(iii) They have carefully examined the Registration Statement
and the Final Prospectus and, in their opinion (A) the Registration
Statement and the Final Prospectus, as of such Delivery Date, did
not include any untrue statement of a material fact and did not omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the date of this Agreement, no event has occurred which should
have been set forth in a supplement or amendment to the Registration
Statement or the Final Prospectus.
(j) On each Delivery Date, counsel for the Underwriter shall have
been furnished with such documents and opinions as they may require for
the purpose of enabling them to pass upon the issuance and sale of the
Stock as herein contemplated, or other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement, any Interim Prospectus and the Final Prospectus or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained,
and all proceedings taken by the Company in connection with the issuance
and sale of the Stock as herein contemplated shall be satisfactory in form
and substance to the Underwriter and counsel for the Underwriter.
(k) There shall not have been, since the date hereof or since the
respective dates as of which information is given in the Final Prospectus,
any material adverse change in the condition, financial or otherwise, or
in the consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business.
(l) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's or
any significant subsidiary's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's or any Significant
Subsidiary's debt securities or preferred stock.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii)
a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of the Underwriter,
<PAGE>
16
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock on the terms and in the manner contemplated in the
Final Prospectus.
(n) The closing and issuance of the 2,000,000 PIES contemplated by
the underwriting agreement of even date hereof between the Company and the
Underwriter shall have occurred concurrently with or prior to the issuance
of the Stock on the First Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Underwriter,
its officers and employees and each person, if any, who controls the Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Stock), to which the Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Registration Statement, any
Interim Prospectus or the Final Prospectus, or in any amendment or supplement
thereto, or (B) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the Stock
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application") Blue Sky Application, or (ii) the omission or alleged omission to
state in the Registration Statement, any Interim Prospectus or the Final
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse the Underwriter and
each such officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the Underwriter, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be
liable under this Section 8(a) in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Interim Prospectus or the Final
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application in reliance upon and in conformity with written information
concerning the Underwriter furnished to the Company by or on behalf of the
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to the Underwriter or to any officer, employee or controlling person of the
Underwriter.
<PAGE>
17
(b) The Underwriter shall indemnify and hold harmless the Company,
its officers and employees, each of its directors and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement, any Interim Prospectus or the Final
Prospectus, or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in the
Registration Statement, any Interim Prospectus or the Final Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning the Underwriter
furnished to the Company by or on behalf of the Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which the
Underwriter may otherwise have to the Company or any such director, officer,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that the Underwriter shall
have the right to employ counsel to represent jointly the Underwriter and its
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriter against the Company under this Section 8 if, in the reasonable
judgment of the Underwriter, it is advisable for the Underwriter and its
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification
<PAGE>
18
or contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the written consent of the indemnifying party or if there be a
final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a), 8(b) or 8(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party under
Section 8(a), 8(b) or 8(c), as the case may be, in respect of any loss, claim
damage or liability or any action in respect thereof, referred to therein,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof referred
to in Section 8(a), 8(b) or 8(c), as the case may be, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriter on the other from the offering of the Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses) received by the
Company on the one hand, and the total underwriting discounts and commissions
received by the Underwriter with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the shares of the Stock under this Agreement, in each case as
set forth on the cover of the Final Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriter, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to in this Section 8(d). The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount of any
damages which the Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
<PAGE>
19
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges that the
statements with respect to the public offering of the Stock set forth [on the
cover page of, and under the caption "Underwriting"] in, the Final Prospectus
are correct and constitute the only information concerning the Underwriter
furnished in writing to the Company specifically for inclusion in the
Registration Statement and the Final Prospectus.
9. TERMINATION. The obligations of the Underwriter hereunder may be
terminated by the Underwriter by notice given to and received by the Company
prior to delivery of and payment for the Stock if, prior to that time, any of
the events described in Sections 7(k), 7(l) or 7(m) shall have occurred or if
the Underwriter shall decline to purchase the Stock for any reason permitted
under this Agreement.
10. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
212-526-6588) with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, Lehman
Brothers Inc., Three World Financial Center, 10th Floor, New York, New
York 10285;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Jonathon K. Heffron, Esq. (Fax:
713-543-6469);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Company and
their respective successors ans assigns. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control the Underwriter within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriter contained in Section 8(b) of this Agreement shall be deemed to be
for the benefit of directors of the Company and officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
<PAGE>
20
12. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
13. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
16. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
17. CONSENT TO JURISDICTION. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby may be instituted in the federal courts of
the United States of America located in the City of New York or the courts of
the State of New York in each case located in the Borough of Manhattan in the
City of New York (collectively, the "Specified Courts"), and irrevocably submits
to the exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court, as to which such jurisdiction
is non-exclusive) of such courts in any such suit, action or proceeding. The
parties further agree that service of any process, summons, notice or document
by mail to such party's address as set forth in Section 10 hereof shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum.
<PAGE>
21
If the foregoing correctly sets forth the agreement between the
Company and the Underwriter, please indicate your acceptance in the space
provided for that
purpose below.
Very truly yours,
BANK UNITED CORP.
By_________________________
Name:
Title:
Accepted:
LEHMAN BROTHERS INC.
By _____________________________
Name:
Title:
<PAGE>
22
SCHEDULE 1
LIST OF SUBSIDIARIES
<PAGE>
1
Exhibit A
FORM OF OPINION OF
WACHTELL, LIPTON, ROSEN & KATZ
TO BE DELIVERED PURSUANT TO SECTION 7(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Final
Prospectus, and to enter into and perform its obligations under the Underwriting
Agreement. The activities of each of the Company's subsidiaries are permitted to
subsidiaries of a savings and loan holding company.
(iii) The Bank is the only "significant subsidiary" of the Company (as
such term is defined in Rule 1-02 of Regulation S-X). The only subsidiaries of
the Company other than the Bank are the wholly-owned subsidiaries of the Bank
listed on Exhibit _ to the Registration Statement which, considered in the
aggregate as a single subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X.
(iv) The Company has an authorized capitalization as set forth in the
Final Prospectus. The shares of issued and outstanding capital stock of the
Company, including the shares of Stock to be purchased by the Underwriter from
the Company, have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company, including the shares of Stock to be purchased by the Underwriter from
the Company, was issued in violation of any preemptive or other similar rights
of any securityholder of the Company.
(v) The Stock has been duly authorized by the Company and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable and not subject to the preemptive or other
similar rights of any person; and the Stock conforms to all statements relating
thereto contained in the Final Prospectus and such description conforms to the
rights set forth in the instruments defining the same.
(vi) The Registration Statement has been declared effective under the
Securities Act; the Final Prospectus was filed with the Commission pursuant to
Rule 424(b) in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(vii) The Registration Statement, the Final Prospectus, and each amendment
or supplement to the Registration Statement and the Final Prospectus, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we
express no opinion) complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations; the documents
incorporated by reference in the Final Prospectus and any further amendment or
supplement to any such incorporated document made by the Company prior to the
Closing Date (other than the financial statements and
<PAGE>
2
related schedules contained therein, as to which such counsel need express no
opinion), when they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
(viii) The information in the Final Prospectus under the captions
"Description of the Preferred Stock," "Description of Offered Securities" and
"Federal Income Taxes," and in the Registration Statement under "Part II.
Information Not Required in Prospectus--Item 14. Indemnification of Directors
and Officers," to the extent that such information constitutes summaries of
certain terms of documents referred to therein, constitute accurate summaries of
the terms of such documents in all material respects.
(ix) The information in the Final Prospectus under the caption "Federal
Income Taxes," to the extent that such information purports to constitute
summaries of matters of United States federal tax laws and regulations or legal
conclusions with respect thereto, constitute accurate summaries of the matters
described therein in all material respects.
(x) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Final Prospectus that are not described
as required.
(xi) Neither the Company, the Bank nor any of their respective
subsidiaries is in violation of its charter or by-laws and, to the best of our
knowledge, no default by the Company, the Bank or any of their respective
subsidiaries exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Final Prospectus or filed as an exhibit to the Registration Statement.
(xii) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign including, without limitation, the OTS and FDIC
(other than under the Securities Act and the Rules and Regulations, which have
been obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we express no opinion) is necessary or required
for the performance by the Company of its obligations under the Underwriting
Agreement in connection with the offering or sale of the Stock by the Company
under the Underwriting Agreement, for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement.
(xiii) The execution, delivery and performance of the Underwriting
Agreement by the Company, the consummation of the transactions contemplated
thereby, and compliance by the Company with its obligations under the
Underwriting Agreement have been duly authorized by all necessary corporate
action and do not and will not result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
<PAGE>
3
(xiv) To the best of our knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except as described in Registration Statement or as set forth in
any agreement described therein as containing such rights.
(xv) The Company is not, and upon the sale of the Stock as contemplated in
the Underwriting Agreement and the application of the net proceeds therefrom as
described in the Final Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
1940 Act.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto (except for financial statements
and schedules and other financial data included therein or omitted therefrom, as
to which we make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Final
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), at the time the Final Prospectus
was issued, at the time any such amended or supplemented Final Prospectus was
issued or at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). All terms used but not defined in this
exhibit should have the meanings ascribed to them in the Underwriting Agreement
and should be defined accordingly in the form of opinion to be delivered.
<PAGE>
1
Exhibit B
FORM OF OPINION OF
JONATHON K. HEFFRON
GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 7(c)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Final
Prospectus, and to enter into and perform its obligations under the Underwriting
Agreement. The activities of each of the Company's subsidiaries are permitted to
subsidiaries of a savings and loan company.
(iii) The Bank is the only "significant subsidiary" of the Company (as
such term is defined in Rule 1-02 of Regulation S-X). The only subsidiaries of
the Company other than the Bank are the wholly-owned subsidiaries of the Bank
listed on Exhibit _ to the Registration Statement, which, considered in the
aggregate as a single subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X. The activities of all of the Bank's
subsidiaries are permitted to subsidiaries of a federally chartered savings
bank, the deposits of which are insured by the SAIF, which is administered by
the FDIC.
(iv) The Bank is a federally chartered stock savings bank, duly
incorporated and validly existing under the laws of the United States, and the
Bank's charter is in full force and effect. The Bank is a member of the Federal
Home Loan Bank of Dallas and has been duly issued a certificate stating that its
savings accounts are insured by the FDIC in accordance with applicable law, and
no proceedings for the termination or revocation of such membership or insurance
are pending or, to the best of my knowledge, threatened.
(v) The Bank has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Final Prospectus.
(vi) Each subsidiary of the Bank has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation and has the power and authority to own, lease and operate its
properties and to conduct its business as described in the Final Prospectus. The
activities described in the Final Prospectus of each of the Bank's subsidiaries
are permitted activities of subsidiaries of a federally chartered savings bank,
the deposits of which are insured by the SAIF, which is administered by the
FDIC.
(vii) The Company, the Bank and each subsidiary of the Company or the Bank
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
<PAGE>
2
(viii) All of the issued and outstanding capital stock of the Bank and
each subsidiary of the Bank has been duly authorized and validly issued, is
fully paid and non-assessable and, except as otherwise disclosed in the
Registration Statement, is owned by the Company, directly or through
subsidiaries, to the best of my knowledge, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such subsidiary.
(ix) The Company has an authorized capitalization as set forth in the
Final Prospectus; the shares of issued and outstanding capital stock of the
Company, including the shares of Stock to be purchased by the Underwriter from
the Company, have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company, including the shares of Stock to be purchased by the Underwriter from
the Company, was issued in violation of any preemptive or other similar rights
of any securityholder of the Company.
(x) The sale of the Stock to the Underwriter by the Company is not subject
to the preemptive or other similar rights of any securityholder of the Company.
The Stock conforms to all statements relating thereto contained in the Final
Prospectus and such description conforms to the rights set forth in the
instruments defining the same.
(xi) There is not pending or, to my knowledge, threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or the Bank or
any of their respective subsidiaries is a party, or to which the property of the
Company or the Bank or any of their respective subsidiaries is subject, before
or brought by any court or governmental agency or body, domestic or foreign,
which might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Underwriting Agreement or the performance by the Company of
its obligations thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company, the Bank, or any of their respective
subsidiaries is known by me to be a party or of which any of their respective
property or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse Effect. To the
best of my knowledge, neither the Company nor any of its subsidiaries is a party
to any written agreement or memorandum of understanding with, or commitment
letter or similar undertaking to, or subject to any order or directive issued
by, or a recipient of any extraordinary supervisory letter from, or has adopted
any board resolutions at the request of, any federal or state government agency
or authority with responsibility for the supervision or regulation of depository
institutions or their holding companies or the insurance of deposits, which in
any such case materially restricts the conduct of its business or in any manner
relates to its capital adequacy, its credit policies or its management, nor has
the Company or any of its subsidiaries been advised by any such regulatory
authority that it is contemplating issuing or requesting any such order, decree,
written agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar undertakings or board resolutions. No labor
dispute with the employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers,
<PAGE>
3
manufacturers, customers or contractors, which, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(xvi) The information in the Final Prospectus under the captions
"Description of the Preferred Stock," "Description of Offered Securities" and
"Federal Income Taxes," and in the Registration Statement under "Part II.
Information Not Required in Prospectus--Item 14. Indemnification of Directors
and Officers," to the extent that such information constitutes summaries of
certain terms of documents referred to therein, constitute accurate summaries of
the terms of such documents in all material respects.
(xiii) To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Final Prospectus that are not described
as required.
(xiv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of my knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xv) Neither the Company, the Bank nor any of their respective
subsidiaries is in violation of its charter or by-laws and no default by the
Company, the Bank or any of their respective subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Final Prospectus or filed as an exhibit to the
Registration Statement.
(xvi) The execution, delivery and performance of the Underwriting
Agreement by the Company, and the consummation of the transactions contemplated
thereby and compliance by the Company with its obligations under the
Underwriting Agreement has been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section l(k) of the Underwriting Agreement) under
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to me, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company, the Bank or any of their
respective subsidiaries is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company, the Bank or any of their respective
subsidiaries, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to me, of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company, the Bank, or
any of their respective subsidiaries or any of their respective properties,
assets or operations.
<PAGE>
4
(xvii) There are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company or the Bank under the Securities Act,
except as described in Registration Statement or as set forth in any agreement
described therein as containing such rights.
(xviii) The Company, the Bank and each of its subsidiaries possess such
Governmental Licenses issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them; the Company, the Bank and each of its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company, the Bank nor any of their
respective subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(xix) The Company, the Bank and each of their respective subsidiaries have
good and marketable title to all real, tangible and intangible property
reflected in the most recent balance sheet included in the Final Prospectus as
owned by the Company, the Bank and its subsidiaries and good title to all other
properties reflected in the most recent balance sheet included in the Final
Prospectus as owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the Final Prospectus or (a) do not,
singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company, the Bank or any of their respective subsidiaries; or, with respect to
any such real property, render title unmarketable as to a material part thereof
and all of the leases and subleases material to the business of the Company, the
Bank and of their respective subsidiaries, considered as one enterprise, and
under which the Company, the Bank or any of their respective subsidiaries holds
properties described in the Final Prospectus, are in full force and effect, and
neither the Company, the Bank nor any of their respective subsidiaries has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company, the sank or any of their respective
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company, the Bank or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(xx) Except as described in the Registration Statement or except as would
not, singly or in the aggregate, result in a Material Adverse Effect, (A) the
Company, the Bank and each of their respective subsidiaries is not in violation
of any Environmental Laws, (B) the Company, the Bank and each of their
respective subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company, the Bank or any of their respective subsidiaries and (D) to the
knowledge of the Company there are no
<PAGE>
5
events or circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company,
the sank or any of their respective subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xxi) In the event the Company shall become either directly or indirectly
a bank holding company for purposes of the BHC Act and the BHC Rules, the
current activities of the Company and its subsidiaries (as defined in the BHC
Rules) would be activities permissible for a bank holding company under the BHC
Act and the BHC Rules.
(xxii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign including, without limitation, the OTS
and FDIC is necessary or required by federal banking laws and regulations for
the performance by the Company of its obligations under the Underwriting
Agreement in connection with the offering or sale of the Stock by the Company
under the Underwriting Agreement or the consummation by the Company of the
transactions contemplated by the Underwriting Agreement.
Nothing has come to my attention that would lead me to believe that the
Registration Statement or any amendment thereto, including the information
included in any prospectus that was omitted from such Registration Statement at
the time it became effective but that is deemed to be part of such Registration
Statement at the time it became effective (except for financial statements and
schedules and other financial data included therein or omitted therefrom, as to
which I make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Final Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included therein or omitted therefrom, as to which I
make no statement), at the time the Final Prospectus was issued, at the time any
such amended or supplemented Final Prospectus was issued or at either Delivery
Date, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). All terms used but not defined in this
exhibit should have the meanings ascribed to them in the Underwriting Agreement
and should be defined accordingly in the form of opinion to be delivered.
EXHIBIT 4.4
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PREFERRED STOCK
OF
BANK UNITED CORP.
------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------
BANK UNITED CORP., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), HEREBY CERTIFIES that the
following resolutions were duly adopted by the Board of Directors of the
Corporation on _________, 1999, pursuant to authority conferred upon the Board
of Directors by the provisions of the Restated Certificate of Incorporation of
the Corporation which authorize the issuance of up to 10,000,000 shares of
preferred stock of $0.01 par value per share (the "Preferred Stock"):
RESOLVED that, pursuant to resolutions of the Board of Directors of
Bank United Corp. (the "Corporation") adopted on ________, 1999, the issue of
2,300,000 shares of Series A Preferred Stock, $50 liquidation preference per
share ($0.01 par value), is hereby authorized and the designation, preferences
and privileges, voting rights, relative, participating, optional and other
special rights, and qualifications, limitations and restrictions of all
2,300,000 shares of this Series, in addition to those set forth in the Restated
Certificate of Incorporation of the Corporation, are hereby fixed as follows:
1. DESIGNATION. The designation of this Series shall be Series A Preferred
Stock (hereinafter referred to as this "Series"), and the number of shares
constituting this Series shall be 2,300,000. Shares of this Series shall have a
liquidation preference of $50. The number of authorized shares of this Series
may be reduced by further resolution duly adopted by the Board of Directors of
the Corporation or by any duly authorized committee of the Board of Directors
(collectively, the "Board of Directors") and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
2. DIVIDENDS. (a) The holders of shares of this Series shall be entitled
to receive cash dividends, when, as and if declared by the Board of Directors,
out of funds legally available for that purpose, at the rates set forth below in
this Section 2. Dividends on the shares of this Series
<PAGE>
2
shall be payable, when, as and if declared by the Board of Directors, on
February __, May __, August __ and November __ of each year (each, a "Dividend
Payment Date"), commencing on November __, 1999. Each such dividend shall be
paid to the holders of record of shares of this Series as they appear on the
stock register of the Corporation on such record date, not more than 45 days
preceding the payment date thereof, as shall be fixed by the Board of Directors.
Dividends on the shares of this Series shall be cumulative from the date of
issue.
(b) Dividends payable on the shares of this Series for the period from
August __, 1999 through and including November __, 1999 (the "Initial Dividend
Period") shall be $____ per share. For each quarterly dividend period after the
Initial Dividend Period (each such quarterly dividend period and the Initial
Dividend Period being hereinafter referred to individually as a "Dividend
Period") through and including the Dividend Period ending February __, 2000,
dividends payable on the shares of this Series shall be payable at a rate per
annum of the liquidation preference thereof equal to ___%. For each Dividend
Period beginning on or after February __, 2000, dividends payable on the shares
of this Series shall be payable at a rate per annum of the liquidation
preference thereof equal to __%. The amount of dividends per share for each
Dividend Period shall be computed by dividing the applicable rate for such
Dividend Period by four and applying the resulting rate to the liquidation
preference per share of this Series. Each Dividend Period (other than the
Initial Dividend Period) shall commence on a Dividend Payment Date and shall end
on and include the day next preceding the next Dividend Payment Date.
(c) Dividends payable on this Series for any period greater or less than a
full Dividend Period, other than the Initial Dividend Period, shall be computed
on the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than one month, the actual number of days elapsed in the period.
(d) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity with
or junior to this Series for any period unless full cumulative dividends on the
shares of this Series for all full Dividend Periods ending on or prior to the
date of such dividends on such other series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment. When dividends are not paid in full,
as aforesaid, upon the shares of this Series and any other series of Preferred
Stock ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on this Series and such other
Preferred Stock shall in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of this Series and such
other Preferred Stock bear to each other. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
this Series which may be in arrears.
(e) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (d) of this Section 2) shall be declared
<PAGE>
3
or paid or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock or any
other stock of the Corporation ranking junior to or on a parity with this Series
as to dividends or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to this Series as to dividends and upon liquidation), unless, in each
case, full cumulative dividends on all outstanding shares of this Series shall
have been paid or declared and set aside for payment.
(f) If any dividends payable on this Series with respect to any fiscal
year of the Corporation are not eligible for the dividends-received deduction
set forth in Section 243(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code") (or any successor provision), solely because this Series is treated
as indebtedness pursuant to a final determination within the meaning of Section
1313(a) of the Code to which the Corporation or any U.S. corporate holder is a
party ("Applicable Distribution(s)"), the Corporation shall, within 45 days
after the receipt by the Corporation of such determination, provide notice
thereof to the transfer agent. The transfer agent shall mail a copy of such
notice to each Qualified Investor (as defined below) at the address specified in
the records of the transfer agent as promptly as practicable after its receipt
of such notice from the Corporation. The Corporation shall, within fifteen days
after such notice is given to the transfer agent, pay to the transfer agent an
amount equal to the aggregate Additional Amounts (as defined below) with respect
to all Applicable Distributions during such fiscal year. Upon receipt of such
aggregate Additional Amounts and receipt of an affidavit from each Qualified
Investor, on a form provided by Bank United, certifying that (i) the Qualified
Investor is a domestic taxable corporation and (ii) if the preferred stock had
been treated as debt for U.S. income tax purposes, the dividends-received
deduction with respect to each Applicable Distribution would have been allowed
and available to the Qualified Investor, in light of its particular facts and
circumstances, under all relevant Sections of the Internal Revenue Code,
including, without limitation, Section 246(c), Section 246A and Section 1059,
the transfer agent shall distribute to each such Qualified Investor the
Additional Amount to which such Qualified Investor is entitled with respect to
each Applicable Distribution received by such Qualified Investor during such
fiscal year. Any portion of the aggregate Additional Amounts not distributed by
the transfer agent shall be returned to the Corporation within 90 days of the
transfer agent's receipt of those amounts.
"Qualified Investor" means a holder of record during any fiscal
year which was entitled to receive an Applicable Distribution during such
fiscal year.
"Additional Amount(s)" means payment with respect to any Applicable
Distribution of an amount which, when taken together with such Applicable
Distribution, would cause the net yield in dollars (after federal income tax
consequences) from the aggregate of both the Applicable Distributions and the
Additional Amount, to be equal to the net yield in dollars (after federal income
tax consequences) that would have been realized if the amount of the aggregate
Applicable Distributions treated as a return of capital instead had been treated
as a dividend, giving effect to the dividends-received deduction, for federal
income tax purposes.
<PAGE>
4
Such Additional Amount shall be calculated with consideration being given to the
time value of money, applying the corporate underpayment rate as defined in
Section 6622(a)(2) of the Code as the interest factor, assuming the Additional
Amount is subject to tax as ordinary income, and using the maximum marginal
corporate federal tax rate applicable to ordinary income.
The foregoing provisions shall apply to the Initial Dividend Period
and each subsequent Dividend Period.
3. REDEMPTION. (a) OPTIONAL REDEMPTION. The shares of this Series are not
redeemable prior to February __, 2000. The Corporation, at its option, may
redeem shares of this Series, as a whole or in part, at any time or from time to
time, on or after February __, 2000 at a redemption price of $50 per share plus
accrued and unpaid cumulative dividends thereon (whether or not declared) to the
date fixed for redemption.
(b) MANDATORY REDEMPTION. The Corporation shall redeem, from any source of
funds legally available therefor, all issued and outstanding shares of this
Series, in whole and not in part, on August __, 2004, at a redemption price of
$50 per share plus accrued and unpaid cumulative dividends thereon (whether or
not declared) to the date fixed for redemption.
(c) REDEMPTION PROCEDURES.
(i) In the event that, pursuant to paragraph (a) above, fewer than
all the outstanding shares of this Series are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of Directors and
the shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable, provided that such method satisfies any applicable requirements
of any securities exchange on which this Series is listed.
(ii) In the event the Corporation shall redeem shares of this
Series, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 or more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (i) the redemption date; (ii)
the number of shares of this Series to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (iii) the redemption price; (iv)
the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that dividends on
the shares to be redeemed shall cease to accrue on the redemption date.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation
<PAGE>
5
(except the right to receive from the Corporation the redemption price)
shall cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors shall so require and the notice shall
so state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid. In case fewer than all the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
(iv) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until
such shares are once more designated as part of a particular series by the
Board of Directors.
(v) Notwithstanding the foregoing provisions of this Section 3, if
full cumulative dividends on all outstanding shares of this Series are in
arrears, no shares of this Series shall be redeemed unless all outstanding
shares of this Series are simultaneously redeemed, and the Corporation
shall not purchase or otherwise acquire any shares of this Series;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of this
Series.
4. CONVERSION. The holders of shares of this Series shall not have any
rights to convert such shares into shares of any other class or series of
capital stock of the Corporation.
5. LIQUIDATION RIGHTS. (a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the shares of this
Series shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
or distribution shall be made on the Common Stock or on any other class of stock
ranking junior to this Series upon liquidation, the amount of $50 per share,
plus accrued and unpaid cumulative dividends (whether or not declared) to the
date of the liquidating distribution.
(b) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section 5, the holders of this
Series as such shall have no right or claim to any of the remaining assets of
the Corporation.
(c) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the amounts payable with respect to the shares of
this Series and any other shares of stock of the Corporation ranking as to any
such distribution on a parity with the shares of this Series are not paid in
full, the holders of the shares of this Series and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective distributions to which they are entitled.
(d) Neither the sale of all or substantially all the property or business
of the Corporation, nor the merger or consolidation of the Corporation into or
with any other
<PAGE>
6
corporation or the merger or consolidation of any other corporation into or with
the Corporation, shall be deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary, for the purposes of this Section 5.
6. RANKING. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
(a) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of this Series;
(b) on a parity with shares of this Series, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series (and whether or not such dividends shall
accumulate), if the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, without preference or priority, one
over the other, as between the holders of such stock and the holders of shares
of this Series; and
(c) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes.
7. VOTING RIGHTS. The holders of the shares of this Series shall have the
following voting rights:
(a) Each share of this Series will have the right to vote, with each share
of this Series having 0.10 vote, in connection with matters submitted generally
to the holders of the common stock and other capital stock of the Corporation
entitled to vote in respect of matters submitted to the stockholders of the
Corporation generally. For these purposes, the holders of the shares of this
Series and the holders of the common stock and other capital stock of the
Corporation will vote as a single class.
(b) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the approval of the holders of at least
two-thirds of the then-outstanding shares of this Series, given in person or by
proxy, either in writing or by a vote at a meeting called for the purpose at
which the holders of shares of this Series shall vote together as a separate
class, shall be required for authorizing, effecting or validating any amendment,
alteration or repeal, whether by merger, consolidation or otherwise, of any of
the provisions of the Restated Certificate of Incorporation or of any
certificate amendatory thereof or supplemental thereto (including any
Certificate of Designations or any similar document relating to any series of
Preferred Stock) that adversely affect the powers, preferences, privileges or
rights of this
<PAGE>
7
Series; PROVIDED, HOWEVER, that the creation and issuance of any other class or
series of preferred stock, or any increase in the number of authorized shares of
any preferred stock of any other class or series, in each case ranking on a
parity with or junior to this Series with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up of
the affairs of the Corporation shall not be deemed to adversely affect such
powers, preferences or other special rights.
(c) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the approval of the holders of at least
two-thirds of all of the then-outstanding shares of this Series and all other
series of preferred stock ranking on a parity with shares of this Series, either
as to dividends or upon liquidation, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of preferred stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating (i) the creation, authorization or issuance
of, (ii) the reclassification of any authorized stock of the Corporation into,
or (iii) the creation, authorization or issuance of any obligation or security
convertible into or evidencing the right to purchase, any additional class or
series of stock ranking prior to this Series, either as to dividends or upon
liquidation.
(d) (i) If at any time dividends on this Series shall be in arrears in an
amount equal to six quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a "default
period") which shall extend until such time as all accrued and unpaid dividends
for all previous dividend periods and for the current dividend period on all
shares of this Series then outstanding shall have been declared and paid or set
apart for payment. During each default period, the holders of shares of this
Series and other shares of Preferred Stock on which dividends are in arrears and
as to which similar voting rights have been conferred, voting as a class,
irrespective of series, shall have the right to elect two Directors to the Board
of Directors of the Corporation.
(ii) During any default period, such voting right of the holders of
this Series may be exercised by written consent, at a special meeting
called pursuant to Section 7(d)(iii) hereof or at any annual meeting of
stockholders. The absence of a quorum of the holders of Common Stock at
any such special or annual meeting shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at which
the holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a
class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is
exercised at an annual meeting, to elect two Directors. If the number
which may be so elected at any special meeting does not amount to the
required number, the holders of Preferred Stock shall have the right to
make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of
the Preferred Stock shall have exercised their right to elect Directors in
any default period and during the continuance of such period, the number
of Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided. Any Director elected by a
vote of the holders of Preferred Stock may be
<PAGE>
8
removed from office, with or without cause, only by the affirmative vote
of the requisite percentage of holders of Preferred Stock required to
elect Directors as specified in this Section 7(d).
(iii) Unless the holders of Preferred Stock, during an existing
default period, shall have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of
the total number of shares of Preferred Stock outstanding, irrespective of
series, on which dividends are in arrears and as to which similar voting
rights have been conferred, may request, the calling of a special meeting
of the holders of Preferred Stock, which meeting shall thereupon be called
by the Chairman, a Vice Chairman or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this Section 7(d)(iii)
shall be given to each holder of record of Preferred Stock entitled to
vote thereat by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than 60 days
after such order or request or, in default of the calling of such meeting
within 60 days after such order or request, such meeting may be called on
similar notice by any shareholder or shareholders owning in the aggregate
not less than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series, entitled to vote thereat.
(iv) In any default period the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors constituting the Board of
Directors until the holders of Preferred Stock, voting as a class, shall
have exercised their right to elect two Directors, after the exercise of
which right (A) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected by
such holders or until the expiration of the default period, and (B) any
vacancy on the Board of Directors may (except as provided in Section
7(d)(ii) hereof) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which
elected the Director whose office shall have become vacant. References in
this Section 7(d) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (B) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (A) the
right of the holders of Preferred Stock as a class to elect Directors
shall cease, (B) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (C) the number of
Directors shall be such number as may be provided for in the Restated
Certificate of Incorporation or Bylaws of the Corporation or by resolution
of the Board of Directors, irrespective of any increase made pursuant to
the provisions of Section 7(d)(ii) hereof (such number being subject,
however, to change thereafter in any manner provided by law or in the
Restated Certificate of Incorporation or Bylaws of the Corporation). Any
<PAGE>
9
vacancies on the Board of Directors effected by the provisions of clauses
(B) and (C) in the preceding sentence may be filled by a majority of the
remaining Directors.
(e) Except as set forth herein or required by applicable law, holders of
shares of this Series shall have no voting rights and their consent shall not be
required for taking any corporate action.
[Signature appears on subsequent page.]
<PAGE>
10
IN WITNESS WHEREOF, Bank United Corp. has caused its corporate seal
to be hereunto affixed and this Certificate to be signed by its [Corporate
Secretary], ___________, this __th day of August, 1999.
BANK UNITED CORP.
By:_____________________________
Corporate Secretary
EXHIBIT 4.5
CERTIFICATE OF DESIGNATIONS
OF
SERIES B PREFERRED STOCK
OF
BANK UNITED CORP.
------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------
BANK UNITED CORP., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), HEREBY CERTIFIES that the
following resolutions were duly adopted by the Board of Directors of the
Corporation on _________, 1999, pursuant to authority conferred upon the Board
of Directors by the provisions of the Restated Certificate of Incorporation of
the Corporation which authorize the issuance of up to 10,000,000 shares of
preferred stock of $0.01 par value per share (the "Preferred Stock"):
RESOLVED that, pursuant to resolutions of the Board of Directors of
Bank United Corp. (the "Corporation") adopted on ________, 1999, the issue of
2,000,000 shares of Series B Preferred Stock, $50 liquidation preference per
share ($0.01 par value), is hereby authorized and the designation, preferences
and privileges, voting rights, relative, participating, optional and other
special rights, and qualifications, limitations and restrictions of all
2,000,000 shares of this Series, in addition to those set forth in the Restated
Certificate of Incorporation of the Corporation, are hereby fixed as follows:
1. DESIGNATION. The designation of this Series shall be Series B Preferred
Stock (hereinafter referred to as this "Series"), and the number of shares
constituting this Series shall be 2,000,000. Shares of this Series shall have a
liquidation preference of $50. The number of authorized shares of this Series
may be reduced by further resolution duly adopted by the Board of Directors of
the Corporation or by any duly authorized committee of the Board of Directors
(collectively, the "Board of Directors") and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
2. DIVIDENDS. (a) The holders of shares of this Series shall be entitled
to receive cash dividends, when, as and if declared by the Board of Directors,
out of funds legally available for
<PAGE>
2
that purpose, at the rates set forth below in this Section 2. Dividends on the
shares of this Series shall be payable, when, as and if declared by the Board of
Directors, quarterly in arrears on February __, May __, August __ and November
__ of each year (each, a "Dividend Payment Date"), commencing on November __,
1999, or if such date is not a Business Day (as defined below), the next
succeeding Business Day. Each such dividend be paid to the holders of record of
shares of this Series as they appear on the stock register of the Corporation on
such record date, not more than 60 days nor less than 10 days preceding the
applicable payment date thereof, as shall be fixed by the Board of Directors;
PROVIDED, HOWEVER, that holders of shares of this Series called for redemption
on a Redemption Date falling between the record date associated with a Dividend
Payment Date and such Dividend Payment Date shall receive the applicable
dividend payment, together with all other accumulated and unpaid dividends on
such date as shall be fixed for redemption. Dividends on the shares of this
Series shall accumulate and be cumulative from the date of original issuance.
"Business Day" shall mean any day other than a Saturday or Sunday or a day on
which banking institutions in New York City are authorized or required by law or
executive order to remain closed.
(b) For each quarterly dividend period from August __, 1999 through and
including November __, 1999 (each, a "Dividend Period") through and including
the Dividend Period ending [ ]__, 2002, dividends payable on the shares of this
Series shall be payable at a rate per annum of the liquidation preference
thereof equal to ___% (the "Initial Dividend Period"). For each Dividend Period
after the Initial Dividend Period, dividends payable on the shares of this
Series shall be payable at a rate per annum of the liquidation preference
thereof equal to the Reset Rate (as defined below). The amount of dividends per
share for each Dividend Period shall be computed by dividing the applicable rate
for such Dividend Period by four and applying the resulting rate to the
liquidation preference per share of this Series. Each Dividend Period (other
than the Initial Dividend Period) shall commence on a Dividend Payment Date and
shall end on and include the day next preceding the next Dividend Payment Date.
(c) Dividends payable on this Series for any period greater or less than a
full Dividend Period, other than the Initial Dividend Period, shall be computed
on the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than one month, the actual number of days elapsed in the period.
(d) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity with
or junior to this Series for any period unless full cumulative dividends on the
shares of this Series for all full Dividend Periods ending on or prior to the
date of such dividends on such other series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment. When dividends are not paid in full,
as aforesaid, upon the shares of this Series and any other series of Preferred
Stock ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on this Series and such other
Preferred Stock shall in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of this Series and such
other Preferred Stock bear to each other. No interest, or sum of
<PAGE>
3
money in lieu of interest, shall be payable in respect of any dividend payment
or payments on this Series which may be in arrears.
(e) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (d) of this Section 2) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each case, full
cumulative dividends on all outstanding shares of this Series shall have been
paid or declared and set aside for payment.
3. REMARKETING. The dividend rate on this Series shall be reset to the
Reset Rate on the third day preceding the Purchase Contract Settlement Date (as
defined below). The Corporation shall request, not later than 15 nor more than
30 calendar days prior to the Remarketing Date (as defined below), that the
Depositary (as defined below) notify the Holders of shares of this Series and
the holders of Corporate PIES of the Remarketing and of the procedures that must
be followed if a Holder of Corporate PIES wishes to make a Cash Settlement.
(a) Not later than 5:00 p.m., New York City time, on the seventh
Business Day preceding the Purchase Contract Settlement Date, each Holder may
elect to have the shares of this Series held by such Holder remarketed in the
Remarketing. Under Section 5.4 of the Purchase Contract Agreement, holders of
Corporate PIES that do not give notice of their intention to make a Cash
Settlement of the purchase contract component of their Corporate PIES prior to
such time in the manner specified in such Section, or that give such notice but
fail to deliver cash prior to 11:00 a.m., New York City time, on or prior to the
fifth Business Day preceding the Purchase Contract Settlement Date, shall be
deemed to have consented to the disposition of the shares of this Series
component of their Corporate PIES in the Remarketing. Holders of the shares of
this Series that are not a component of Corporate PIES wishing to have their
shares of this Series remarketed shall give to the Purchase Contract Agent
notice of their election prior to 11:00 a.m., New York City time on such fifth
Business Day. Any such notice shall be irrevocable and may not be conditioned
upon the level at which the Reset Rate is established in the Remarketing.
Promptly after 11:00 a.m., New York City time, on such fifth Business Day, the
Purchase Contract Agent, based on the notices received by it prior to such time
(including notices from the Purchase Contract Agent as to purchase contracts for
which Cash Settlement has been elected and cash received), shall notify the
Remarketing Agent of the number of shares of this Series to be tendered for
purchase in the Remarketing.
(b) If any Holder of shares of this Series does not give a notice of
its intention to make a Cash Settlement or gives such notice but fails to
deliver cash as described in Section 3(a)
<PAGE>
4
above, or gives a notice of election to have shares of this Series that are not
a component of Corporate PIES remarketed, then the shares of this Series of such
Holder shall be deemed tendered for purchase in the Remarketing, notwithstanding
any failure by such Holder to deliver or properly deliver such shares to the
Remarketing Agent for purchase.
(c) The right of each Holder to have shares of this Series tendered
for purchase shall be limited to the extent that (i) the Remarketing Agent
conducts a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
the shares of this Series tendered have not been called for redemption, (iii)
the Remarketing Agent is able to find a purchaser or purchasers for the tendered
shares of this Series and (iv) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.
(d) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket, at a price equal to 100.50% of the
aggregate liquidation preference thereof, the shares of this Series tendered or
deemed tendered for purchase.
(e) If, as a result of the efforts described in Section 3(d), the
Remarketing Agent determines that it will be able to remarket all of the shares
of this Series tendered or deemed tendered for purchase at a price of 100.50% of
the aggregate liquidation preference of such shares prior to 4:00 p.m., New York
City time, on the Remarketing Date, the Remarketing Agent shall determine the
Reset Rate, which shall be the rate per annum (rounded to the nearest
one-thousandth (0.001) of one percent per annum) that the Remarketing Agent
determines, in its sole judgment, to be the lowest rate per annum that will
enable it to remarket all of the shares of this Series tendered or deemed
tendered for Remarketing.
(f) If none of the Holders of the shares of this Series or the
holders of the Corporate PIES elects to have shares of this Series remarketed in
the Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole discretion, as the rate that would have been established had
a Remarketing been held on the Remarketing Date.
(g) If, by 4:00 p.m., New York City time, on the Remarketing Date,
the Remarketing Agent is unable to remarket all of the Preferred Securities
tendered or deemed tendered for purchase, a "Failed Remarketing" shall be deemed
to have occurred and the Remarketing Agent shall so advise by telephone the
Depositary and the Corporation. In the event of a Failed Remarketing, the Reset
Rate shall equal (1) the "AA" Composite Commercial Paper Rate (as defined
below), plus (2) the Applicable Margin (as defined below).
(h) By approximately 4:30 p.m., New York City time, on the
Remarketing Date, PROVIDED that there has not been a Failed Remarketing, the
Remarketing Agent shall advise, by telephone (i) the Depositary and the
Corporation of the Reset Rate determined in the Remarketing and the number of
shares of this Series sold in the Remarketing, (ii) each purchaser (or the
Depositary Participant thereof) of the Reset Rate and the number of shares of
this Series such purchaser is to purchase and (iii) each purchaser to give
instructions to its Depositary Participant to pay the purchase price on the
Purchase Contract Settlement Date in same day funds against delivery of the
shares of this Series purchased through the facilities of the Depositary.
<PAGE>
5
(i) In accordance with the Depositary's normal procedures, on the
Purchase Contract Settlement Date, the transactions described above with respect
to each Preferred Security tendered for purchase and sold in the Remarketing
shall be executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such shares of this
Series delivered by book-entry as necessary to effect purchases and sales of
such shares of this Series. The Depositary shall make payment in accordance with
its normal procedures.
(j) If any Holder of shares of this Series selling shares of this
Series in the Remarketing fails to deliver such shares, the Depositary
Participant of such selling holder and of any other Person that was to have
purchased shares of this Series in the Remarketing may deliver to any such other
Person a number of shares of this Series that is less than the number of shares
of this Series that otherwise was to be purchased by such Person. In such event,
the number of shares of this Series to be so delivered shall be determined by
such Depositary Participant, and delivery of such lesser number of shares of
this Series shall constitute good delivery.
(k) The Remarketing Agent is not obligated to purchase any shares of
this Series that otherwise would remain unsold in the Remarketing. Neither the
Corporation nor the Remarketing Agent shall be obligated in any case to provide
funds to make payment upon tender of the shares of this Series for Remarketing.
(l) Under the Remarketing Agreement, the Corporation shall be liable
for, and shall pay, any and all costs and expenses incurred in connection with
the Remarketing.
(m) The tender and settlement procedures set in this Section 3,
including provisions for payment by purchasers of the shares of this Series in
the Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the shares of
this Series at the time of the Remarketing, to facilitate the tendering and
remarketing of the shares of this Series in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.
(n) Definitions:
""AA" COMPOSITE COMMERCIAL PAPER RATE" on any date shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by S&P or the equivalent of such
rating by S&P or the equivalent of such rating by S&P or another rating agency,
as made available on a discount basis or otherwise by the Federal Reserve Board
for the business day immediately preceding such date or (ii) if the Federal
Reserve Board does not make available any such rate, then the arithmetic average
of those rates, as quoted on a discount basis or otherwise, by the Commercial
Paper Dealers to the Remarketing Agent for the close of business on the Business
Day next preceding such date. If any Commercial Paper Dealer does not quote a
rate required to determine the "AA" Composite Commercial Paper Rate, the "AA"
Composite Commercial Paper Rate will be determined on the basis of the quotation
or quotations furnished by the remaining Commercial Paper Dealer or
<PAGE>
6
Commercial Paper Dealers and any substitute commercial paper dealer or
substitute commercial paper dealers selected by the Remarketing Agent or, if the
Remarketing Agent does not select any such substitute commercial paper dealer or
substitute commercial paper dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers.
"APPLICABLE MARGIN" shall mean the spread determined as set forth below,
based on the prevailing rating of the Remarketed shares of this Series in effect
at the close of business on the Business Day immediately preceding the date of a
Failed Remarketing:
PREVAILING RATING SPREAD
----------------- ------
[AA/ "Aa"] ............................. 3.00%
[A/ "a"] ............................... 4.00%
[BBB/ "Baa"] ........................... 5.00%
[Below BBB/ "Baa"] ..................... 7.00%
For purposes of this definition, the "prevailing rating" of the
Remarketed shares of this Series shall be:
(i) [AA/ "Aa"] if such shares have a credit rating of [AA-] or
better by S&P and ["Aa3"] or better by Moody's or the equivalent of
such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent;
(ii) if not under clause (i) above, then [A/ "a"] if the
Remarketed Securities have a credit rating of [A-] or better by S&P
and ["A3"] or better by Moody's or the equivalent of such ratings by
such agencies or a substitute rating agency or substitute rating
agencies selected by the Remarketing Agent;
(iii) if not under clauses (i) or (ii) above, then [BBB/
"Baa"] if the Remarketed Securities have a credit rating of [BBB-]
or better by S&P and ["Baa3"] or better by Moody's or the equivalent
of such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent; or
(iv) if not under clauses (i) - (iii) above, then [Below BBB/
"Baa."]
"CASH SETTLEMENT" shall have the meaning specified in the Purchase
Contract Agreement.
"COMMERCIAL PAPER DEALERS" shall mean Lehman Commercial Paper Inc.,
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
or their affiliates or successors, if such affiliates or successors are
commercial paper dealers.
"CORPORATE PIES" shall mean a stock purchase unit consisting of (A) a
stock purchase contract under which (i) the holder of the unit will purchase
from the Corporation, for $50.00 in
<PAGE>
7
cash, a certain number of shares of common stock of the Corporation and (ii) the
Corporation will pay such holder contract adjustment payments and (B) beneficial
ownership of a shares of this Series.
"DEPOSITARY" shall mean, with respect to shares of this Series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depositary for
such shares, and initially shall be The Depository Trust Company.
"DEPOSITARY PARTICIPANT" shall mean a member of, or participant in, the
Depositary.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"GLOBAL SECURITY" shall mean a global Series B Preferred Stock Certificate
registered in the name of a Depositary or its nominee.
"HOLDER" shall mean any holder of shares of this Series.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"PURCHASE CONTRACT AGENT" shall mean the purchase contract agent under the
Purchase Contract Agreement, including successor purchase contract agents.
"PURCHASE CONTRACT AGREEMENT" shall mean the Purchase Contract Agreement
dated as of August [ ], 1999 between the Corporation and [ ],
as Purchase Contract Agent.
"PURCHASE CONTRACT SETTLEMENT DATE" shall mean [ ], 2002.
"REMARKETING AGENT" shall mean the remarketing agent selected by the
Corporation, including any successor remarketing agents selected by the
Corporation.
"REMARKETING DATE" shall mean the third Business Day preceding the
Purchase Contract Settlement Date.
"RESET RATE" shall mean shall mean the distribution rate per annum that
results from the Remarketing pursuant this Section 3.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
McGraw-Hill Corporation.
4. REDEMPTION. (a) OPTIONAL REDEMPTION. The shares of this Series are not
redeemable prior to [ ] __, 2002. The Corporation, at its option, may redeem
shares of this Series, as a whole or in part, at any time or from time to time,
on or after [ ] __, 2002
<PAGE>
8
at a redemption price of $50 per share plus accrued and unpaid cumulative
dividends thereon (whether or not declared) to the date fixed for redemption.
(b) MANDATORY REDEMPTION. The Corporation shall redeem, from any source of
funds legally available therefor, all issued and outstanding shares of this
Series, in whole and not in part, on August __, 2004, at a redemption price of
$50 per share plus accrued and unpaid cumulative dividends thereon (whether or
not declared) to the date fixed for redemption.
(c) REDEMPTION PROCEDURES.
(i) In the event that, pursuant to paragraph (a) above, fewer than
all the outstanding shares of this Series are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of Directors and
the shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable, PROVIDED that such method satisfies any applicable requirements
of any securities exchange on which this Series is listed.
(ii) In the event the Corporation shall redeem shares of this
Series, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 or more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (i) the redemption date; (ii)
the number of shares of this Series to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (iii) the redemption price; (iv)
the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that dividends on
the shares to be redeemed shall cease to accrue on the redemption date.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the right
to receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the
Board of Directors shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price
aforesaid. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
(iv) Any shares of this Series which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of
<PAGE>
9
Preferred Stock, without designation as to series until such shares are
once more designated as part of a particular series by the Board of
Directors.
(v) Notwithstanding the foregoing provisions of this Section 4, if
full cumulative dividends on all outstanding shares of this Series are in
arrears, no shares of this Series shall be redeemed unless all outstanding
shares of this Series are simultaneously redeemed, and the Corporation
shall not purchase or otherwise acquire any shares of this Series;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of this
Series.
5. CONVERSION. The holders of shares of this Series shall not have any
rights to convert such shares into shares of any other class or series of
capital stock of the Corporation.
6. LIQUIDATION RIGHTS. (a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the shares of this
Series shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
or distribution shall be made on the Common Stock or on any other class of stock
ranking junior to this Series upon liquidation, the amount of $50 per share,
plus accrued and unpaid cumulative dividends (whether or not declared) to the
date of the liquidating distribution.
(b) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section 6, the holders of this
Series as such shall have no right or claim to any of the remaining assets of
the Corporation.
(c) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the amounts payable with respect to the shares of
this Series and any other shares of stock of the Corporation ranking as to any
such distribution on a parity with the shares of this Series are not paid in
full, the holders of the shares of this Series and of such other shares shall
share ratably in any such distribution of assets of the Corporation in
proportion to the full respective distributions to which they are entitled.
(d) Neither the sale of all or substantially all the property or business
of the Corporation, nor the merger or consolidation of the Corporation into or
with any other corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of this
Section 6.
7. RANKING. For purposes of this resolution, any stock of any class or
classes of the Corporation shall be deemed to rank:
(a) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts
<PAGE>
10
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of this
Series;
(b) on a parity with shares of this Series, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series (and whether or not such dividends shall
accumulate), if the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, without preference or priority, one
over the other, as between the holders of such stock and the holders of shares
of this Series; and
(c) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of shares of such
class or classes.
8. VOTING RIGHTS. The holders of the shares of this Series shall have the
following voting rights:
(a) Each share of this Series will have the right to vote, with each share
of this Series having 0.10 vote, in connection with matters submitted generally
to the holders of the common stock and other capital stock of the Corporation
entitled to vote in respect of matters submitted to the stockholders of the
Corporation generally. For these purposes, the holders of the shares of this
Series and the holders of the common stock and other capital stock of the
Corporation will vote as a single class.
(b) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the approval of the holders of at least
two-thirds of the then-outstanding shares of this Series, given in person or by
proxy, either in writing or by a vote at a meeting called for the purpose at
which the holders of shares of this Series shall vote together as a separate
class , shall be required for authorizing, effecting or validating any
amendment, alteration or repeal, whether by merger, consolidation or otherwise,
of any of the provisions of the Restated Certificate of Incorporation or of any
certificate amendatory thereof or supplemental thereto (including any
Certificate of Designations or any similar document relating to any series of
Preferred Stock) that adversely affect the powers, preferences, privileges or
rights of this Series; PROVIDED, HOWEVER, that the creation and issuance of any
other class or series of preferred stock, or any increase in the number of
authorized shares of any preferred stock of any other class or series, in each
case ranking on a parity with or junior to this Series with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the affairs of the Corporation shall not be deemed
to adversely affect such powers, preferences or other special rights.
(c) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the approval of the holders of at least
two-thirds of all of the then-outstanding
<PAGE>
11
shares of this Series and all other series of preferred stock ranking on a
parity with shares of this Series, either as to dividends or upon liquidation,
given in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series and such other
series of preferred stock shall vote together as a single class without regard
to series, shall be necessary for authorizing, effecting or validating (i) the
creation, authorization or issuance of, or (ii) the reclassification of any
authorized stock of the Corporation into, any obligation or security convertible
into or evidencing the right to purchase any additional class or series of stock
ranking prior to this Series, either as to dividends or upon liquidation.
(d) (i) If at any time dividends on this Series shall be in arrears in an
amount equal to six quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a "default
period") which shall extend until such time as all accrued and unpaid dividends
for all previous dividend periods and for the current dividend period on all
shares of this Series then outstanding shall have been declared and paid or set
apart for payment. During each default period, the holders of shares of this
Series and other shares of Preferred Stock on which dividends are in arrears and
as to which similar voting rights have been conferred, voting as a class,
irrespective of series, shall have the right to elect two Directors to the Board
of Directors of the Corporation.
(ii) During any default period, such voting right of the holders of
this Series may be exercised by written consent, at a special meeting
called pursuant to Section 7(d)(iii) hereof or at any annual meeting of
stockholders. The absence of a quorum of the holders of Common Stock at
any such special or annual meeting shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at which
the holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a
class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is
exercised at an annual meeting, to elect two Directors. If the number
which may be so elected at any special meeting does not amount to the
required number, the holders of Preferred Stock shall have the right to
make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of
the Preferred Stock shall have exercised their right to elect Directors in
any default period and during the continuance of such period, the number
of Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided. Any Director elected by a
vote of the holders of Preferred Stock may be removed from office, with or
without cause, only by the affirmative vote of the requisite percentage of
holders of Preferred Stock required to elect Directors as specified in
this Section 8(d).
(iii) Unless the holders of Preferred Stock, during an existing
default period, shall have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of
the total number of shares of Preferred Stock outstanding, irrespective of
series, on which dividends are in arrears and as to which similar voting
rights have been conferred, may request, the calling of a special meeting
of the holders of Preferred
<PAGE>
12
Stock, which meeting shall thereupon be called by the Chairman, a Vice
Chairman or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Section 7(d)(iii) shall be given to each holder of
record of Preferred Stock entitled to vote thereat by mailing a copy of
such notice to him at his last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time not earlier than
10 days and not later than 60 days after such order or request or, in
default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any shareholder
or shareholders owning in the aggregate not less than 10% of the total
number of Preferred Stock outstanding, irrespective of series, entitled to
vote thereat.
(iv) In any default period the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors constituting the Board of
Directors until the holders of Preferred Stock, voting as a class, shall
have exercised their right to elect two Directors, after the exercise of
which right (A) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected by
such holders or until the expiration of the default period, and (B) any
vacancy on the Board of Directors may (except as provided in Section
8(d)(ii) hereof) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which
elected the Director whose office shall have become vacant. References in
this Section 8(d) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (B) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (A) the
right of the holders of Preferred Stock as a class to elect Directors
shall cease, (B) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (C) the number of
Directors shall be such number as may be provided for in the Restated
Certificate of Incorporation or Bylaws of the Corporation or by resolution
of the Board of Directors, irrespective of any increase made pursuant to
the provisions of Section 8(d)(ii) hereof (such number being subject,
however, to change thereafter in any manner provided by law or in the
Restated Certificate of Incorporation or Bylaws of the Corporation). Any
vacancies on the Board of Directors effected by the provisions of clauses
(B) and (C) in the preceding sentence may be filled by a majority of the
remaining Directors.
(e) Except as set forth herein or required by applicable law, holders of
shares of this Series shall have no voting rights and their consent shall not be
required for taking any corporate action.
[Signature appears on subsequent page.]
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13
IN WITNESS WHEREOF, Bank United Corp. has caused its corporate seal
to be hereunto affixed and this Certificate to be signed by its [Corporate
Secretary], ___________, this __th day of August, 1999.
BANK UNITED CORP.
By: _____________________________
Corporate Secretary
EXHIBIT 4.14
FORM OF PURCHASE CONTRACT AGREEMENT
PURCHASE CONTRACT AGREEMENT, dated as of August [ ], 1999, between
BANK UNITED CORP., a Delaware corporation (the "Company"), and [ ], a [ ]
corporation, acting as purchase contract agent for the Holders of Securities
from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Agent, as provided in this Agreement, the valid obligations
of the Company, and to constitute these presents a valid agreement of the
Company, in accordance with its terms, have been done.
W I T N E S S E T H :
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section I.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
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(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(d) the following terms have the meanings given to them in the Remarketing
Agreement: (i) Remarketing; and (ii) Reset Rate; and
(e) the following terms have the meanings given to them in this Section
1.1(e):
"ACT," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"ADJUSTED CONTRACT ADJUSTMENT PAYMENT RATE," with respect to any Reset
Transaction, means the rate per annum that is the arithmetic average of the
rates quoted by two Reference Dealers selected by the Company or its successor
as the rate at which Contract Adjustment Payments should accrue so that the fair
market value, expressed in dollars, of a Corporate PIES immediately after the
later of (i) public announcement of such Reset Transaction or (ii) public
announcement of a change in dividend policy in connection with such Reset
Transaction will equal the average Trading Price of a Corporate PIES for the 20
Trading Days immediately preceding the date of public announcement of such Reset
Transaction; PROVIDED that the Adjusted Contract Adjustment Payment Rate shall
not be less than [____]% per annum.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall
mean such Person.
"AGREEMENT" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning specified in Section 5.1.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"BENEFICIAL OWNER" means, with respect to a Global Certificate, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
<PAGE>
"BOARD OF DIRECTORS" means the board of directors of the Company or a
duly authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of each of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification
and delivered to the Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 3.6.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which banking institutions in the City of New York are authorized or required by
law or executive order to remain closed; PROVIDED that for purposes of the
second paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange, Inc.
is closed or suspended.
"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
"CERTIFICATE" means a Corporate PIES Certificate or a Treasury PIES
Certificate.
"CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations of
the Company under which the Shares are issued.
"CLEARING AGENCY" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING PRICE" has the meaning specified in Section 5.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning specified in Section 1 of the Pledge
Agreement.
"COLLATERAL ACCOUNT" has the meaning specified in the Pledge Agreement.
"COLLATERAL AGENT" means [ ], as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the
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<PAGE>
applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent"
shall mean the Person who is then the Collateral Agent thereunder.
"COLLATERAL SUBSTITUTION" has the meaning specified in Section 3.13.
"COMMON STOCK" means the shares of Common Stock, par value $0.01, of
the Company.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"CONTRACT ADJUSTMENT PAYMENTS" means, (a) if a Reset Transaction has not
occurred, the fee payable by the Company in respect of each Purchase Contract,
equal to [____]% per annum of the Stated Amount, or (b) following the occurrence
of a Reset Transaction, the Adjusted Contract Adjustment Payment Rate related to
such Reset Transaction until any succeeding Reset Transaction shall occur,
computed (i) for any full quarterly period on the basis of a 360-day year of
twelve 30-day months and (ii) for any period shorter than a full quarterly
period for which such payments are calculated, on the basis of a 30-day month
and, for periods of less than a month, the actual number of days elapsed per
30-day month.
"CORPORATE PIES" means the collective rights and obligations of a
Holder of a Corporate PIES Certificate in respect of the Shares, subject to
the Pledge thereof, and the related Purchase Contract.
"CORPORATE PIES CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Corporate PIES specified on
such certificate, substantially in the form of Exhibit A hereto.
"CORPORATE PIES REGISTER" and "CORPORATE PIES REGISTRAR" have the
respective meanings specified in Section 3.5.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Agent at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at [ ] Attention:
[ ].
"CURRENT MARKET PRICE" has the meaning specified in Section 5.6(a)(8).
"DEPOSITARY" means DTC until another Clearing Agency becomes its
successor.
"DIVIDEND RATE" means the percentage rate per annum at which dividends
will be paid on each Share initially.
"DIVIDEND YIELD," on any security for any period, means the dividends paid
or proposed to be paid pursuant to an announced dividend policy on such security
for such period divided by, if with respect to dividends paid on such security,
the average Closing Price of such security
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<PAGE>
during such period and, if with respect to dividends so proposed to be paid on
such security, the Closing Price of such security on the effective date of the
related Reset Transaction.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EARLY SETTLEMENT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT AMOUNT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT DATE" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT RATE" has the meaning specified in Section 5.9(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning specified in Section 1.4.
"EXPIRATION TIME" has the meaning specified in Section 5.6(a)(6).
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.
"HOLDER," when used with respect to a Security, means the Person in whose
name the Security evidenced by a Corporate PIES Certificate and/or a Treasury
PIES Certificate is registered in the related Corporate PIES Register and/or the
Treasury PIES Register, as the case may be; PROVIDED, HOWEVER, that in
determining whether the Holders of the requisite number of Corporate PIES and/or
Treasury PIES have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Clearing
Agency which is the holder of such Global Certificate has sent an omnibus proxy
assigning voting rights to the Clearing Agency Participants to whose accounts
the Securities are credited on the record date, the term "Holder" shall mean
such Clearing Agency Participant acting at the direction of the Beneficial
Owners.
"ISSUER ORDER" or "ISSUER REQUEST" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or one of its Vice Presidents and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"OFFICERS" CERTIFICATE" means a certificate signed by the Chairman of the
Board, its President or one of its Vice Presidents and by the Treasurer, an
Assistant Treasurer, the Secretary
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<PAGE>
or an Assistant Secretary, of the Company, and delivered to the Agent. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Agent. An opinion of counsel may rely
on certificates as to matters of fact.
"Outstanding Securities," with respect to any Corporate PIES or Treasury
PIES, means, as of the date of determination, all Corporate PIES or Treasury
PIES evidenced by Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury PIES and (B)
Corporate PIES for which the underlying Shares have been theretofore
deposited with the Agent in trust for the Holders of such Corporate PIES;
(ii) Corporate PIES and Treasury PIES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Corporate PIES and Treasury PIES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the Corporate
PIES or Treasury PIES evidenced by such Certificate are valid obligations
of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
number of the Corporate PIES or Treasury PIES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Corporate PIES or
Treasury PIES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding
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<PAGE>
Securities, except that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Corporate PIES or Treasury PIES which a Responsible Officer of
the Agent knows to be so owned shall be so disregarded. Corporate PIES or
Treasury PIES so owned which have been pledged in good faith may be regarded as
Outstanding Securities if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Corporate PIES or
Treasury PIES and that the pledgee is not the Company or any Affiliate of the
Company.
"PAYMENT DATE" means each [__________], [__________], [__________] and
[__________], commencing on [__________], 1999.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1 of the
Pledge Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"PIES" means the collective reference to the Corporate PIES and the
Treasury PIES.
"PLAN" means an employee benefit plan that is subject to ERISA, a plan or
individual retirement account that is subject to Section 4975 of the Code or any
entity whose assets are considered assets of any such plan.
"PLEDGE" means the pledge under the Pledge Agreement of the Shares or
the Treasury Securities in each case constituting a part of the Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent, the Securities
Intermediary and the Agent, on its own behalf and as attorney-in-fact for the
Holders from time to time of the Securities.
"PLEDGED SHARES" has the meaning set forth in the Pledge Agreement.
"PLEDGED TREASURY SECURITIES" has the meaning set forth in the Pledge
Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor Corporate PIES
Certificate or a Predecessor Treasury PIES Certificate.
"PREDECESSOR CORPORATE PIES CERTIFICATE" of any particular Corporate PIES
Certificate means every previous Corporate PIES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Corporate PIES evidenced thereby; and, for the purposes of this definition, any
Corporate PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Corporate PIES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Corporate
PIES Certificate.
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<PAGE>
"PREDECESSOR TREASURY PIES CERTIFICATE" of any particular Treasury PIES
Certificate means every previous Treasury PIES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Treasury PIES evidenced thereby; and, for the purposes of this definition, any
Treasury PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury PIES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury PIES
Certificate.
"PROCEEDS" has the meaning set forth in Section 1 of the Pledge
Agreement.
"PURCHASE CONTRACT," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, in each case on the terms and subject to
the conditions set forth in Article Five hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means [__________], 2002.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning specified in
Section 5.5.
"PURCHASE PRICE" has the meaning specified in Section 5.1.
"PURCHASED SHARES" has the meaning specified in Section 5.6(a)(6).
"RECORD DATE" for the Contract Adjustment Payments payable on any Payment
Date means, as to any Global Certificate, the Business Day next preceding such
Payment Date, and as to any other Certificate, 15 Business Days prior to such
Payment Date.
"REFERENCE DEALER" means a dealer engaged in the trading of convertible
securities.
"REGISTER" means the Corporate PIES Register and the Treasury PIES
Register.
"REGISTRAR" means the Corporate PIES Registrar and the Treasury PIES
Registrar.
"REMARKETING AGENT" has the meaning specified in Section 5.4(b).
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
the date hereof, between the Company and the Remarketing Agent.
"REORGANIZATION EVENT" has the meaning specified in Section 5.6(b).
"RESET TRANSACTION" means a merger, consolidation or statutory share
exchange to which the Person that is the issuer of the shares of Common Stock
for which the Purchase Contracts are then to be settled is a party, a sale of
all or substantially all assets of such Person, a recapitalization of such
shares or a distribution described in Section 5.6(a)(4) by such Person and
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<PAGE>
after the effective date of such transaction the Purchase Contracts are then to
be settled for shares of Common Stock of a Person (i) which had a Dividend Yield
for the four fiscal quarters immediately preceding the public announcement
thereof which was, or (ii) that announces a dividend policy prior to the
effective date thereof which policy, if implemented, would result in a Dividend
Yield on such common shares for the next four fiscal quarters which would be,
more than 250 basis points higher than the Dividend Yield on the shares of
Common Stock for which the Purchase Contracts are to be settled prior to such
effective date for the four fiscal quarters immediately preceding such public
announcement.
"RESPONSIBLE OFFICER," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"SECURITY" means a Corporate PIES or a Treasury PIES.
"SECURITIES INTERMEDIARY" means [_____________________], as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Securities Intermediary" shall mean
such successor.
"SETTLEMENT RATE" has the meaning specified in Section 5.1.
"SHARES" means the shares of Series B Preferred Stock to be issued by
the Company under the Certificate of Designations.
"STATED AMOUNT" means $50 in cash.
"TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.
"TERMINATION EVENT" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief with
respect to the Company under the Bankruptcy Code or any other similar applicable
Federal or State law, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company,
and, unless such judgment, decree or order shall have been entered within 60
days prior to the Purchase Contract Settlement Date, such decree or order shall
have continued undischarged and unstayed for a period of 60 days; or (ii) a
judgment, decree or court order for the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such judgment,
decree or order shall have continued undischarged and unstayed for a period of
60 days; or (iii) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy Code, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization or liquidation of the
Company under the Bankruptcy Code or any other similar applicable Federal or
State law, or shall consent to the filing of any
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<PAGE>
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of its creditors, or shall admit in
writing its inability to pay its debts generally as they become due.
"THRESHOLD APPRECIATION PRICE" has the meaning specified in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"TRADING DAY" has the meaning specified in Section 5.1.
"TRADING PRICE" of a security on any date of determination means (i) the
closing sale price (or, if no closing price is reported, the last reported sale
price) of a security (regular way) on the NYSE on such date, (ii) if such
security is not listed for trading on the NYSE on any such date, the closing
sale price as reported in the composite transactions for the principal United
States securities exchange on which such security is so listed, (iii) if such
security is not so listed on a United States national or regional securities
exchange, the closing sale price as reported by The NASDAQ Stock Market, (iv) if
such security is not so reported, the price quoted by Interactive Data
Corporation for such security or, if Interactive Data Corporation is not quoting
such price, a similar quotation service selected by the Company, (v) if such
security is not so quoted, the average of the mid-point of the last bid and ask
prices for such security from at least two dealers recognized as market-makers
for such security or (vi) if such security is not so quoted, the average of the
last bid and ask prices for such security from a Reference Dealer.
"TREASURY PIES" means, following the substitution of one or more Treasury
Securities for Shares as collateral to secure a holder's obligations under a
Purchase Contract, the collective rights and obligations of a Holder of a
Treasury PIES Certificate in respect of such Treasury Securities, subject in
each case to the Pledge thereof, and the related Purchase Contract.
"TREASURY PIES CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury PIES specified on
such certificate, substantially in the form of Exhibit A hereto .
"TREASURY PIES REGISTER" and "TREASURY PIES REGISTRAR" have the
respective meanings specified in Section 3.5.
"TREASURY SECURITY" means zero-coupon U.S. Treasury Securities (Cusip
Number ________) which are the principal strip of the __% U. S. Treasury
Securities which mature on [__________], 2002.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated as of
the date hereof, between the Company and Lehman Brothers Inc.
"VICE PRESIDENT" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
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Section I.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action in
accordance with any provision of this Agreement, the Company shall furnish to
the Agent an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by
any provision of this Agreement relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(1 a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2 a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3 a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4 a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section I.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of
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the Company unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section I.4. Acts of Holders; Record Dates.
(a Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Agent and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 7.1) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Agent deems sufficient.
(c The ownership of Securities shall be proved by the Corporate PIES
Register or the Treasury PIES Register, as the case may be.
(d Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate PIES and the Outstanding Treasury PIES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Corporate PIES or the Treasury
PIES, as the case may be, whether or not such Holders remain Holders after such
record date; PROVIDED that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new record date for any
action for
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which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and be of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; PROVIDED that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Section I.5. Notices.
Any notice or communication is duly given if in writing and delivered in
Person or mailed by first class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Agent only upon receipt thereof:
If to the Agent:
Telecopier No.:
Attention:
If to the Company:
Telecopier No.:
Attention:
If to the Collateral Agent:
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Telecopier No.:
Attention:
If to the Indenture Trustee:
Telecopier No.:
Attention:
Section I.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section I.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section I.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
Section I.9. Separability Clause.
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In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
Section I.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
Section I.11. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section I.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Corporate PIES
Certificates or the Treasury PIES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, PROVIDED that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Corporate PIES Certificates or the Treasury PIES Certificates) Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section I.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section I.14. Inspection of Agreement.
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A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.
ARTICLE II
Certificate Forms
Section II.1. Forms of Certificates Generally.
The Corporate PIES Certificates (including the form of Purchase Contract
forming part of the Corporate PIES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate PIES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Corporate PIES Certificates, as evidenced by their
execution of the Corporate PIES Certificates.
The definitive Corporate PIES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Corporate PIES
evidenced by such Corporate PIES Certificates, consistent with the provisions of
this Agreement, as evidenced by their execution thereof.
The Treasury PIES Certificates (including the form of Purchase Contracts
forming part of the Treasury PIES evidenced thereby) shall be in substantially
the form set forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury PIES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury PIES Certificates, as evidenced by their
execution of the Treasury PIES Certificates.
The definitive Treasury PIES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Treasury PIES
evidenced by such Treasury PIES Certificates, consistent with the provisions of
this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE
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DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND
NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN."
Section II.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Corporate
PIES shall be in substantially the form set forth on the form of the Corporate
PIES Certificates.
The form of the Agent's certificate of authentication of the Treasury PIES
shall be in substantially the form set forth on the form of the Treasury PIES
Certificates.
ARTICLE III
The Securities
Section III.1. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to [__________] except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate PIES or Treasury PIES and any integral
multiple thereof.
Section III.2. Rights and Obligations Evidenced by the Certificates.
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Each Corporate PIES Certificate shall evidence the number of Corporate
PIES specified therein, with each such Corporate PIES representing the ownership
by the Holder thereof of a beneficial interest in a Share, subject to the Pledge
of such Share by such Holder pursuant to the Pledge Agreement, and the rights
and obligations of the Holder thereof and the Company under one Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of
each Corporate PIES shall pledge, pursuant to the Pledge Agreement, the Share,
forming a part of such Corporate PIES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such Share for the benefit of the Company, to secure the obligation of
the Holder under each Purchase Contract to purchase the Common Stock of the
Company. Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Corporate
PIES Certificate to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends or
other payments or to consent or to receive notice as a stockholder in respect of
the meetings of stockholders or for the election of directors of the Company or
for any other matter, or any other rights whatsoever as a stockholder of the
Company.
Each Treasury PIES Certificate shall evidence the number of Treasury PIES
specified therein, with each such Treasury PIES representing the ownership by
the Holder thereof of a 1/20 undivided beneficial interest in a Treasury
Security with a principal amount equal to $1,000, subject to the Pledge of such
Treasury Security by such Holder pursuant to the Pledge Agreement, and the
rights and obligations of the Holder thereof and the Company under one Purchase
Contract. Prior to the purchase, if any, of shares of Common Stock under each
Purchase Contract, such Purchase Contract shall not entitle the Holder of a
Treasury PIES Certificate to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any dividends
or other payments or to consent or to receive notice as a stockholder in respect
of the meetings of stockholders or for the election of directors of the Company
or for any other matter, or any other rights whatsoever as a stockholder of the
Company.
Section III.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents. The
signature of any of these officers on the Certificates may be manual or
facsimile.
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Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Agent, as such Holder's attorney-in-fact. Such
signature by an authorized signatory of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the Purchase Contracts
evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section III.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate PIES or Treasury PIES are listed, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like aggregate number of Corporate PIES or Treasury PIES, as
the case may be, as the temporary Certificate or Certificates so surrendered.
Until so exchanged, the temporary Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Corporate PIES or
Treasury PIES, as the case may be, evidenced thereby as definitive Certificates.
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Section III.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Corporate PIES Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Corporate PIES
Certificates and of transfers of Corporate PIES Certificates (the Agent, in such
capacity, the "Corporate PIES Registrar") and a register (the "Treasury PIES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Treasury PIES Certificates
and transfers of Treasury PIES Certificates (the Agent, in such capacity, the
"Treasury PIES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like aggregate number of Corporate PIES or Treasury
PIES, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate PIES or Treasury PIES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same aggregate number of
Corporate PIES or Treasury PIES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Corporate PIES or Treasury PIES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer or
for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.10 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate in
exchange for any other Certificate presented or surrendered for registration of
transfer or for exchange on or after the Business Day immediately preceding
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the earlier of the Purchase Contract Settlement Date or the Termination Date. In
lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i) if
the Purchase Contract Settlement Date has occurred, deliver the shares of Common
Stock issuable in respect of the Purchase Contracts forming a part of the
Securities evidenced by such other Certificate or (ii) if a Termination Event
shall have occurred prior to the Purchase Contract Settlement Date, transfer the
Shares or the Treasury Securities, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
Section III.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
by, or on behalf of, the Company. Such Global Certificate shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9. The Agent shall enter into an
agreement with the Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.9:
(a the provisions of this Section 3.6 shall be in full force and effect;
(b the Company shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of Contract Adjustment
Payments, if any, and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c to the extent that the provisions of this Section 3.6 conflict with any
other provisions of this Agreement, the provisions of this Section 3.6 shall
control; and
(d the rights of the Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements
between such Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants.
Section III.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
Section III.8. Appointment of Successor Clearing Agency.
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If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section III.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to Section 3.8 or
(ii) there shall have occurred and be continuing a default by the Company in
respect of its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Securities by the Clearing
Agency, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Clearing Agency. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions.
Section III.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate, evidencing the same number of Corporate PIES or Treasury PIES, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity as may be required by them to hold each of them
and any agent of any of them harmless, then, in the absence of notice to the
Company or the Agent that such Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Corporate PIES or Treasury PIES, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate, or (ii) if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the Shares or
the Treasury Securities, as the case
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may be, evidenced thereby, in each case subject to the applicable conditions and
in accordance with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Agent may require the payment by the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section III.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Corporate PIES or Treasury PIES evidenced thereby, for the purpose of receiving
dividend payments on the Shares, receiving payments of Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any dividend payments on the Shares or the Contract
Adjustment Payments payable in respect of the Purchase Contracts constituting a
part of the Corporate PIES or Treasury PIES evidenced thereby shall be overdue
and notwithstanding any notice to the contrary, and neither the Company nor the
Agent, nor any agent of the Company or the Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section III.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on or
after the Purchase Contract Settlement Date, upon the transfer of Shares or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement, or
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upon the registration of a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of a Corporate PIES shall, if surrendered
to any Person other than the Agent, be delivered to the Agent and, if not
already cancelled, shall be promptly cancelled by it. The Company may at any
time deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall, upon
Issuer Order, be promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates held by the
Agent shall be destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section III.13. Substitution of Securities.
A Holder may separate the Shares from the related Purchase Contracts in
respect of a Corporate PIES by substituting, for such Shares, Treasury
Securities in an aggregate principal amount equal to the aggregate principal
amount of such Shares (a "Collateral Substitution"), at any time from and after
the date of this Agreement and on or prior to the seventh Business Day
immediately preceding the Purchase Contract Settlement Date by (a) depositing
with the Securities Intermediary Treasury Securities or securities entitlements
thereto having an aggregate principal amount equal to the aggregate liquidation
preference of the Shares comprising part of such Corporate PIES and (b)
transferring the related Corporate PIES to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit C hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Securities Intermediary and requesting that the Agent instruct the Collateral
Agent to release the Shares underlying such Corporate PIES, whereupon the Agent
shall promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A to the Pledge Agreement. Upon receipt of the Treasury
Securities described in clause (a) above and the instruction described in clause
(b) above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will cause the Securities Intermediary to release from the Pledge to the
Agent, on behalf of the Holder, Shares having a corresponding aggregate
principal amount, free and clear of the Company's security interest therein, and
upon receipt thereof the Agent shall promptly:
(i0 cancel the related Corporate PIES;
(ii0 transfer the Shares to the Holder; and
(iii0 authenticate, execute on behalf of such Holder and deliver a
Treasury PIES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Corporate PIES.
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Holders who elect to separate the Shares from the related Purchase
Contract and to substitute Treasury Securities for such Shares shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions only in integral multiples of 20
Corporate PIES if Treasury Securities are being substituted for Shares.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate PIES or
fails to deliver a Corporate PIES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Shares, constituting a part
of such Corporate PIES, and any dividends on such Shares, shall be held in the
name of the Agent or its nominee in trust for the benefit of such Holder, until
such Corporate PIES is so transferred or the Corporate PIES Certificate is so
delivered, as the case may be, or, with respect to a Corporate PIES Certificate,
such Holder provides evidence satisfactory to the Company and the Agent that
such Corporate PIES Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a Corporate PIES remains in effect, such Corporate PIES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Shares and the Purchase Contract
comprising such Corporate PIES may be acquired, and may be transferred and
exchanged, only as a Corporate PIES.
Section III.14. Reestablishment of Corporate PIES.
A Holder of a Treasury PIES may recreate Corporate PIES at any time on or
prior to the seventh Business Day immediately preceding the Purchase Contract
Settlement Date by (a) depositing with the Securities Intermediary Shares or
security entitlements thereto having an aggregate liquidation preference equal
to the aggregate principal amount at maturity of the Treasury Securities
comprising part of the Treasury PIES and (b) transferring the related Treasury
PIES to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit C hereto, stating that the Holder has transferred the relevant
amount of Shares to the Securities Intermediary and requesting that the Agent
instruct the Collateral Agent to release the Treasury Securities underlying such
Treasury PIES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit C to the Pledge
Agreement. Upon receipt of the Shares described in clause (a) above and the
instruction described in clause (b) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge to the Agent free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i0 cancel the related Treasury PIES;
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(ii0 transfer the Treasury Securities to the Holder; and
(iii0 authenticate, execute on behalf of such Holder and deliver a
Corporate PIES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Treasury PIES.
Holders who elect to recreate Corporate PIES shall be responsible for any
fees or expenses payable to the Collateral Agent for its services as Collateral
Agent in respect of the substitution, and the Company shall not be responsible
for any such fees or expenses.
Holders of Treasury PIES may reestablish Corporate PIES in integral
multiples of 20 Treasury PIES for 20 Corporate PIES.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury PIES remains in effect, such Treasury PIES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury PIES in respect of the 1/20 of a Treasury Security
and the Purchase Contract comprising such Treasury PIES may be acquired, and may
be transferred and exchanged, only as a Treasury PIES.
Section III.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Agent
of the Shares or the Treasury Securities, as the case may be, underlying the
Corporate PIES and the Treasury PIES pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Shares or Treasury Securities, as the case may be, from each Holder by written
request, substantially in the form of Exhibit D hereto, mailed to such Holder at
its address as it appears in the Corporate PIES Register or the Treasury PIES
Register, as the case may be. Upon book-entry transfer of the Corporate PIES or
Treasury PIES or delivery of a Corporate PIES Certificate or Treasury PIES
Certificate to the Agent with such transfer instructions, the Agent shall
transfer the Shares or Treasury Securities, as the case may be, underlying such
Corporate PIES or Treasury PIES, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in accordance with such
instructions. In the event a Holder of Corporate PIES or Treasury PIES fails to
effect such transfer or delivery, the Shares or Treasury Securities, as the case
may be, underlying such Corporate PIES or Treasury PIES, as the case may be, and
any dividends or interest thereon, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until the earlier of (a)
transfer of such Corporate PIES or Treasury PIES or surrender of the Corporate
PIES Certificate or Treasury PIES Certificate or such Holder provides
satisfactory evidence that such Corporate PIES Certificate or Treasury PIES
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company and (b) the expiration of the time
period specified in the abandoned property laws of the relevant State.
Section III.16. No Consent to Assumption.
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Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for reorganization or
liquidation.
ARTICLE IV
The Shares
Section IV.1. Payment of Dividends; Rights to Dividends Preserved; Dividend Rate
Reset.
Dividends on any Share which are paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Corporate
PIES Certificate (or one or more Predecessor Corporate PIES Certificates) of
which such Share is a part is registered at the close of business on the Record
Date for such Payment Date.
Each Corporate PIES Certificate evidencing Shares delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Corporate PIES Certificate shall carry the rights to accrued and unpaid
dividends, and to accrue dividends, which were carried by the Shares underlying
such other Corporate PIES Certificate.
In the case of any Corporate PIES with respect to which Cash Settlement of
the underlying Purchase Contract is effected on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date pursuant to
prior notice, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on an Early Settlement Date, or with respect to
which a Collateral Substitution is effected, in each case on a date that is
after any Record Date and on or prior to the next succeeding Payment Date,
dividends on the Shares underlying such Corporate PIES otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Cash
Settlement or Early Settlement or Collateral Substitution, and such dividends
shall, subject to receipt thereof by the Agent, be payable to the Person in
whose name the Corporate PIES Certificate (or one or more Predecessor Corporate
PIES Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Corporate PIES with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date
or an Early Settlement Date, as the case may be, or with respect to which a
Collateral Substitution has been effected, dividends on the related Shares that
would otherwise be payable after the Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of such Corporate
PIES; PROVIDED, HOWEVER, that to the extent that such Holder continues to hold
the separated Shares that formerly comprised
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a part of such Holder's Corporate PIES, such Holder shall be entitled to receive
the dividends on such separated Shares pursuant to their terms.
The applicable dividend rate borne by the Shares on and after the Purchase
Contract Settlement Date shall be established pursuant to the Remarketing on the
third Business Day immediately preceding the Purchase Contract Settlement Date
to equal to the Reset Rate (such Reset Rate to be in effect on and after the
Purchase Contract Settlement Date).
Section IV.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Shares, as the case may be, but only to the extent instructed in writing by the
Holders as described below. Upon receipt of notice of any meeting at which
holders of Shares are entitled to vote or upon any solicitation of consents,
waivers or proxies of holders of Shares, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Corporate PIES a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Shares, as the case may be, entitled to vote) shall be entitled to instruct
the Agent as to the exercise of the voting rights pertaining to such Shares
underlying their Corporate PIES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of Corporate
PIES on such record date received by the Agent at least six days prior to such
meeting, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum liquidation preference of Shares as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Corporate PIES, the Agent shall abstain from voting the Shares
underlying such Corporate PIES. The Company hereby agrees, if applicable, to
solicit Holders of Corporate PIES to timely instruct the Agent in order to
enable the Agent to vote such Shares.
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ARTICLE V
The Purchase Contracts
Section V.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred in
accordance with Section 5.9 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate unless, on or prior
to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $[_______] (the "Threshold
Appreciation Price"), [_______] shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold Appreciation
Price, but is greater than $[_______], the number of shares of Common Stock
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Value is less than or equal to $[_______], [_______] shares of
Common Stock per Purchase Contract, in each case subject to adjustment as
provided in Section 5.6 (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). As provided in Section 5.10, no fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 Trading Days ending on the third Trading
Day immediately preceding the Purchase Contract Settlement Date. The "Closing
Price" of the Common Stock on any date of determination means (i) the closing
sale price (or, if no closing price is reported, the last reported sale price)
of the Common Stock on the Nasdaq National Market on such date, (ii) if the
Common Stock is not listed for trading on the Nasdaq National Market on any such
date, the closing sale price as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, (iii) if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization or (iv) if such bid price is not
available, the average of the mid-point of the last bid and ask prices of the
Common Stock on such date from at least three nationally recognized independent
investment banking firms retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
Each Holder of a Corporate PIES or a Treasury PIES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its
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obligations under such Purchase Contracts, and consents to the provisions
hereof, irrevocably authorizes the Agent as its attorney-in-fact to enter into
and perform this Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Shares or the Treasury Securities pursuant to the Pledge Agreement; PROVIDED
that upon a Termination Event, the rights of the Holder of such Security under
the Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of a Corporate PIES or a Treasury PIES, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, Proceeds from the remarketing of the Shares or the Proceeds of
the Treasury Securities on the Purchase Contract Settlement Date shall be paid
by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee)
by the terms of this Agreement, the Purchase Contracts underlying such
Certificate and the Pledge Agreement and the transferor shall be released from
the obligations under this Agreement, the Purchase Contracts underlying the
Certificates so transferred and the Pledge Agreement. The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
Section V.2. Contract Adjustment Payments.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name a Certificate (or one or more Predecessor Certificates) is registered at
the close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the office of the Agent in The
City of New York maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Corporate PIES Register or Treasury PIES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued Contract Adjustment
Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of a Corporate PIES) any other
Certificate shall carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were carried by the
Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall be
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paid to the Person in whose name the Certificate evidencing such Security (or
one or more Predecessor Certificates) is registered at the close of business on
such Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, Contract Adjustment Payments that would otherwise be payable
after the Early Settlement Date with respect to such Purchase Contract shall not
be payable.
Section V.3. [Intentionally omitted].
Section V.4. Payment of Purchase Price.
(a) (i) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9, each Holder of a Corporate PIES who intends to pay in
cash to satisfy such Holder's obligation under the Purchase Contract shall
notify the Agent by use of a notice in substantially the form of Exhibit E
hereto of its intention to pay in cash (the "Cash Settlement") the Purchase
Price for the shares of Common Stock to be purchased pursuant to a Purchase
Contract. Such notice shall be given prior to 5:00 p.m., New York City time, on
the seventh Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m., New York City time, on the next succeeding Business
Day, the Agent shall notify the Collateral Agent of the receipt of such notices
from Holders intending to make a Cash Settlement.
(ii) A Holder of a Corporate PIES who has so notified the Agent of its
intention to make a Cash Settlement shall pay the Purchase Price to the
Securities Intermediary for deposit in the Collateral Account prior to 11:00
a.m., New York City time, on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in immediately
available funds payable to or upon the order of the Securities Intermediary. Any
cash received by the Collateral Agent shall be invested promptly by the
Securities Intermediary in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Securities Intermediary in respect of the investment earnings
from the investment in such Permitted Investments, shall be distributed to the
Agent when received for payment to the Holder of the related Corporate PIES on
the Purchase Contract Settlement Date.
(iii) If a Holder of a Corporate PIES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (a)(i) above,
or does notify the Agent as provided in paragraph (a)(i) above of its intention
to pay the Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, such Holder shall be deemed to have consented to the
disposition of the Pledged Shares pursuant to the remarketing as described in
paragraph (b) below.
(iv) Not later than 15 calendar days nor more than 30 calendar days prior
to the third Business Day immediately preceding the Purchase Contract Settlement
Date, the Company shall request DTC (or any successor Clearing Agency), to
notify the Beneficial Owners or
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Clearing Agency Participants holding Corporate PIES or Treasury PIES of the
procedures to be followed by Holders of Corporate PIES who intend to effect the
settlement of their obligations under the Purchase Contracts underlying such
Corporate PIES with separate cash on or prior to the fifth Business Day prior to
the Purchase Contract Settlement Date.
(v) Promptly after 11:00 a.m., New York City time, on the fifth Business
Day preceding the Purchase Contract Settlement Date, the Agent, based on notices
received by the Agent pursuant to Section 5.4(a)(i) hereof and notice from the
Securities Intermediary regarding cash received by it prior to such time, shall
notify the Collateral Agent of the liquidation preference of Shares to be
tendered for purchase in the Remarketing in a notice substantially in the form
of Exhibit F hereto.
(b) In order to dispose of the Shares, Corporate PIES Holders who have not
notified the Agent of their intention to effect a Cash Settlement as provided in
paragraph (a)(i) above, or who have so notified the Agent but fail to make such
payment as required by paragraph (a)(ii) above, the Company shall engage Lehman
Brothers Inc. (the "Remarketing Agent") pursuant to the Remarketing Agreement to
sell such Shares. In order to facilitate the remarketing, the Agent, based on
the notices specified in Section 5.4(a)(v), shall notify the Remarketing Agent,
promptly after 11:00 a.m., New York City time, on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, of the aggregate
principal amount of Shares that are a component of Corporate PIES to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, shall cause such Shares to be presented to the Remarketing
Agent for remarketing. Upon receipt of such notice from the Agent and such
Shares, the Remarketing Agent shall, on the third Business Day immediately
preceding the Purchase Contract Settlement Date, use commercially reasonable
efforts to remarket such Shares on such date at a price of 100.50% of the
aggregate principal amount at maturity of such Shares. The proceeds equal to
100% of the aggregate principal amount at maturity of the remarketed Shares
shall automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement, to satisfy in full such Corporate PIES Holders' obligations to
pay the Purchase Price for the Common Stock under the related Purchase Contracts
on the Purchase Contract Settlement Date. The proceeds equal to .50% of the
aggregate principal amount at maturity of the remarketed Shares shall
automatically be applied, in accordance with the Pledge Agreement, to pay the
remarketing fee of the Remarketing Agent. Corporate PIES Holders whose Shares
are so remarketed shall not be responsible for the payment of any remarketing
fee in connection therewith. If, in spite of using their reasonable efforts, the
Remarketing Agent cannot remarket the related Shares of such Holders of
Corporate PIES at a price of 100.50% of the aggregate principal amount at
maturity of such Shares, the remarketing shall be deemed to have failed (a
"Failed Remarketing") and in accordance with the terms of the Pledge Agreement
the Collateral Agent, for the benefit of the Company, shall be entitled to
exercise its rights as a secured party with respect to such Shares, including
those actions specified in paragraph (c) below; PROVIDED that if upon a Failed
Remarketing the Collateral Agent exercises such rights for the benefit of the
Company with respect to such Shares, any accrued and unpaid dividends on such
Shares shall become payable by the Company to the Agent for payment to the
Beneficial Owner of the Corporate PIES to which such Shares relate. The Company
shall cause a notice of such Failed Remarketing to be published no later than
the Business Day immediately preceding the Purchase
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Contract Settlement Date in a daily newspaper in the English language of general
circulation in the City of New York, which is expected to be THE WALL STREET
JOURNAL.
(c) With respect to any Shares which are subject to a Failed Remarketing,
the Collateral Agent for the benefit of the Company reserves all of its rights
as a secured party with respect thereto and, subject to applicable law and
paragraph (g) below, may, among other things, (i) retain the Shares in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sell the Shares in one or more public or private sales.
(d) (i) Unless a Holder of Treasury PIES settles the underlying Purchase
Contract through the early delivery of cash to the Purchase Contract Agent in
the manner described in Section 5.9, each Holder of a Treasury PIES who intends
to pay in cash shall notify the Agent by use of a notice in substantially the
form of Exhibit E hereto of its intention to pay in cash the Purchase Price for
the shares of Common Stock to be purchased pursuant to a Purchase Contract. Such
notice shall be given on or prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Treasury PIES who has so notified the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i) above
shall pay the Purchase Price to the Securities Intermediary for deposit in the
Collateral Account prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of the Securities
Intermediary. Any cash received by the Collateral Agent shall be invested
promptly by the Securities Intermediary in Permitted Investments and paid to the
Company on the Purchase Contract Settlement Date in settlement of the Purchase
Contract in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in respect of the
investment earnings from the investment in such Permitted Investments shall be
distributed to the Agent when received for payment to the Holder.
(iii) If a Holder of a Treasury PIES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i) above,
or does notify the Agent as provided in paragraph (d)(i) above of its intention
to pay the Purchase Price in cash, but fails to make such payment as required by
paragraph (d)(ii) above, then upon the maturity of the Pledged Treasury
Securities held by the Securities Intermediary on the Business Day immediately
prior to the Purchase Contract Settlement Date, the principal amount of the
Treasury Securities received by the Securities Intermediary shall be invested
promptly in Permitted Investments. On the Purchase Contract Settlement Date an
amount equal to the Purchase Price shall be remitted to the Company as payment
thereof without receiving any instructions from the Holder. In the event the sum
of the proceeds from the related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral Agent
shall cause the Securities Intermediary to distribute such excess to the Agent
for the benefit of the Holder of the related Treasury PIES when received.
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(e) Any distribution to Holders of excess funds and interest described
above shall be payable at the office of the Agent in the City of New York
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Register.
(f) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Shares or the Pledged Treasury Securities, as the case may be,
underlying the relevant Security to be released from the Pledge free and clear
of any security interest of the Company and transferred to the Agent for
delivery to the Holder thereof or its designee as soon as practicable and (ii)
subject to the receipt thereof, the Agent shall, by book-entry transfer, or
other appropriate procedures, in accordance with written instructions provided
by the Holder thereof, transfer such Shares or such Treasury Securities, as the
case may be (or, if no such instructions are given to the Agent by the Holder,
the Agent shall hold such Shares or such Treasury Securities, as the case may
be, and any dividends or interest thereon, as the case may be, in the name of
the Agent or its nominee in trust for the benefit of such Holder until the
expiration of the time period specified in the abandoned property laws of the
relevant State).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent paid by Early Settlement or
Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.
Section V.5. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.6(b), the Company shall issue and deposit with the Agent,
for the benefit of the Holders of the Outstanding Securities, one or more
certificates representing the newly issued shares of Common Stock registered in
the name of the Agent (or its nominee) as custodian for the Holders (such
certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder. Subject to the foregoing, upon surrender of a
Certificate to the Agent on or after the Purchase Contract Settlement Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Common Stock which such
Holder is entitled to receive pursuant to the provisions of this Article Five
(after taking into account all Securities then held by such Holder), together
with cash in lieu of fractional shares as provided in Section 5.10 and any
dividends or distributions with respect to such Shares constituting part of the
Purchase Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as specified in
the settlement instructions provided by the Holder to the Agent. If any shares
of Common Stock issued in respect of a Purchase Contract are to be registered to
a Person other than the Person in whose name the Certificate evidencing such
Purchase Contract is registered, no such registration
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shall be made unless the Person requesting such registration has paid any
transfer and other taxes required by reason of such registration in a name other
than that of the registered Holder of the Certificate evidencing such Purchase
Contract or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.
Section V.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate in effect
at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
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(3) In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be adjusted so that the same shall equal the
rate determined by dividing the Settlement Rate in effect immediately prior to
the close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall be
such Current Market Price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution. In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section shall not be applicable.
(5) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock (I) cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash (other
than in connection with a Reorganization Event) within the 12 months preceding
the date of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has been made
and (II) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender or
exchange offer by the Company or any of its subsidiaries for all or any portion
of the Common Stock concluded within the 12 months preceding the date of payment
of the distribution described in Clause (I) above and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (4) or paragraph (6) of
this Section has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock on the date for the determination of holders
of shares of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each such case,
immediately
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after the close of business on such date for determination, the Settlement Rate
shall be increased so that the same shall equal the rate determined by dividing
the Settlement Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
Current Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the combined amount
distributed or payable in the transactions described in clauses (I) and (II)
above divided by (y) the number of shares of Common Stock outstanding on such
date for determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of (I) an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that combined together with the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (II) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made, exceeds 15% of the
product of the Current Market Price per share of the Common Stock as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Settlement Rate shall be adjusted
so that the same shall equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the Expiration Time by
a fraction (i) the numerator of which shall be equal to (A) the product of (1)
the Current Market Price per share of the Common Stock on the date of the
Expiration Time and (2) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the transactions described in
clauses (I) and (II) above (assuming in the case of clause (I) the acceptance,
up to any maximum specified in the terms of the tender or exchange offer, of
Purchased Shares), and (ii) the denominator of which shall be equal to the
product of (A) the Current Market Price per share of the Common Stock as of the
Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the number of all
shares validly tendered and not withdrawn as of the
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Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date", when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; PROVIDED, HOWEVER, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also
be made to the Applicable Market Value solely to determine which of clauses (a),
(b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by multiplying
the Applicable Market Value by a fraction of which the numerator shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator
shall be the Settlement Rate immediately before such adjustment; PROVIDED,
HOWEVER, that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
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(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
In the event of (i) any consolidation or merger of the Company with
or into another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another Person of the property of the
Company as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of or after the occurrence of a
Termination Event (any such event, a "Reorganization Event"), the Settlement
Rate will be adjusted to provide that each Holder of Securities will receive on
the Purchase Contract Settlement Date with respect to each Purchase Contract
forming a part thereof, the kind and amount of securities, cash and other
property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a Holder
of the number of shares of Common Stock issuable on account of each Purchase
Contract if the Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event assuming such Holder of Common Stock is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). In the event of
such a Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 5.6(b). Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
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Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section V.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 5.6 and prepare and transmit to the Agent an Officers'
Certificate setting forth the Settlement Rate, the method of calculation
thereof in reasonable detail, and the facts requiring such adjustment and
upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section 5.6
(or if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or delivered with
respect to any Purchase Contract; and the Agent makes no representation with
respect thereto. The Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section V.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments, if the Company shall have such obligation, and the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Securities shall thereafter represent the
right to receive the Shares forming a part of such Securities in the case of
Corporate PIES, or Treasury Securities in the case of Treasury PIES, in
accordance with the provisions of Section 5.4 of the Pledge Agreement. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and the Holders, at their addresses as they appear in the
Register.
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Section V.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early (an "Early Settlement") in the case of Corporate
PIES on or prior to the seventh Business Day immediately preceding the Purchase
Contract Settlement Date and in the case of Treasury PIES on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
in each case, as provided herein. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and accompanied by payment (payable to the Company in immediately available
funds) in an amount (the "Early Settlement Amount") equal to (i) the product of
(A) the Stated Amount times (B) the number of Purchase Contracts with respect to
which the Holder has elected to effect Early Settlement plus (ii) if such
delivery is made with respect to any Purchase Contracts during the period from
the close of business on any Record Date next preceding any Payment Date to the
opening of business on such Payment Date, an amount equal to the sum of (x) the
Contract Adjustment Payments payable on such Payment Date with respect to such
Purchase Contracts plus (y) in the case of a Corporate PIES Certificate, the
distributions on the related Shares payable on such Payment Date. Except as
provided in the immediately preceding sentence and subject to the last paragraph
of Section 5.2, no payment or adjustment shall be made upon Early Settlement of
any Purchase Contract on account of any Contract Adjustment Payments accrued on
such Purchase Contract or on account of any dividends on the Common Stock issued
upon such Early Settlement. If the foregoing requirements are first satisfied
with respect to Purchase Contracts underlying any Securities at or prior to 5:00
p.m., New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements are
first satisfied after 5:00 p.m., New York City time, on a Business Day or on a
day that is not a Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to
receive, [________] shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate"). The
Early Settlement Rate shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted.
(c) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, together
with payment in lieu of any fraction of a share, as provided in Section 5.10,
and (ii) the related Shares, in the case of Corporate PIES, or the related
Treasury Securities, in the case of Treasury PIES, to be released from the
Pledge by the Collateral Agent and transferred, in each case, to the Agent for
delivery to the Holder thereof or its designee.
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(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Shares or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
the Agent shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Shares or Treasury Securities, as the case may be, forming a part of such
Securities, and (ii) deliver to the Holder a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement,
together with payment in lieu of any fraction of a share, as provided in Section
5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section V.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
Section V.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts; PROVIDED, HOWEVER, that the Company shall not be required to
pay any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
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ARTICLE VI
Remedies
Section VI.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall constitute a
component of Corporate PIES or Treasury PIES, the Holder of any Corporate PIES
or Treasury PIES shall have the right, which is absolute and unconditional
(subject to the payment by a holder of Contract Adjustment Payments pursuant to
Section 5.9(a)), to receive payment of each installment of the Contract
Adjustment Payments with respect to the Purchase Contract constituting a part of
such Security on the respective Payment Date for such Security and to purchase
Common Stock pursuant to such Purchase Contract and, in each such case, to
institute suit for the enforcement of any such payment and right to purchase
Common Stock, and such rights shall not be impaired without the consent of such
Holder.
Section VI.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
Section VI.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section VI.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by such
Holders.
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Section VI.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Corporate PIES or
Treasury PIES, by its acceptance of such Corporate PIES or Treasury PIES, shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; PROVIDED that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of dividends payable on any Shares or Contract
Adjustment Payments, if any, on any Purchase Contract on or after the respective
Payment Date therefor in respect of any Security held by such Holder, or for
enforcement of the right to purchase shares of Common Stock under the Purchase
Contracts constituting part of any Security held by such Holder.
Section VI.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
The Agent
Section VII.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this
Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement or the Pledge Agreement
against the Agent; and
(2) in the absence of bad faith or negligence on its part, the Agent
may, with respect to the Securities, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Agent and conforming to the
requirements of this Agreement or the Pledge
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Agreement, as applicable, but in the case of any certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Agent, the Agent shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Agreement or the Pledge Agreement, as applicable.
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Agent from liability for its own negligent action, its
own negligent failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement shall
require the Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if adequate indemnity is
not provided to it.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Agent shall be subject to the
provisions of this Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement in
its capacity as Agent.
Section VII.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section VII.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement or the Pledge
Agreement the Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Agent (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate of the
Company;
(d) the Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
Section VII.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Agent assumes no responsibility for their
accuracy, other than for the Certificate of Authentication contained in the
Certificates. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase Contracts.
Section VII.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section VII.6. Money Held in Custody.
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Money held by the Agent in custody hereunder need not be segregated from
the other funds except to the extent required by law or provided herein. The
Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
Section VII.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable compensation
for all services rendered by it hereunder and under the Pledge Agreement;
(2) except as otherwise expressly provided for herein, to reimburse
the Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in accordance with any provision of
this Agreement and the Pledge Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of its duties hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
Section VII.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section VII.9. Resignation and Removal; Appointment of Successor.
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(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof to
the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as if
the Agent were an indenture trustee under an indenture qualified under the
TIA, after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 7.8 and shall
fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Agent or of its property
shall be appointed or any public officer shall take charge or control of
the Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Agent for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Agent and shall comply
with the applicable requirements of Section 7.10. If no successor Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to give,
notice of each resignation and each removal of the Agent and each appointment of
a successor Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders as their
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names and addresses appear in the applicable Register. Each notice shall include
the name of the successor Agent and the address of its Corporate Trust Office.
Section VII.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time of
such acceptance such successor Agent shall be qualified and eligible under this
Article.
Section VII.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article, with
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Certificates shall have been authenticated and
executed on behalf of the Holders, but not delivered, by the Agent then in
office, any successor by merger, conversion or consolidation to such Agent may
adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section VII.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Agent, and furnish to the Agent reasonable proof that each such
applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicants desire
to communicate with other Holders with respect to their rights
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under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section VII.13. No Obligations of Agent.
Except to the extent otherwise expressly provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability under
this Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Agent or its officers, employees or agents be liable under this Agreement to
any third party for indirect, special, punitive, or consequential loss or damage
of any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Agent, incurred without any act or deed
that is found to be attributable to gross negligence or willful misconduct on
the part of the Agent.
Section VII.14. Tax Compliance.
(a) The Company will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the preparation
and timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its designated
agent.
(b) The Agent shall comply in accordance with the terms hereof with any
written direction received from the Company with respect to the execution or
certification of any required documentation and the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely on any such direction
in accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
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ARTICLE VIII
Supplemental Agreements
Section VIII.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any time
and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, to cure any ambiguity, to
correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or to make any other provisions with respect
to such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section VIII.2. Supplemental Agreements With Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the unanimous
consent of the Holders of each outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
interest on the related Collateral (except for the rights
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of Holders of Corporate PIES to substitute the Treasury Securities for the
Pledged Shares or the rights of holders of Treasury PIES to substitute
Shares for the Pledged Treasury Securities) or otherwise adversely affect
the Holder's rights in or to such Collateral or adversely alter the rights
in or to such Collateral;
(3) reduce any Contract Adjustment Payments or change any place
where, or the coin or currency in which, any Contract Adjustment Payment
is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares
of Common Stock upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect the
Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
PROVIDED that if any amendment or proposal referred to above would adversely
affect only the Corporate PIES or the Treasury PIES, then only the affected
class of Holder as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; provided that the unanimous consent of the
Holders of each outstanding Purchase Contract of such class affected thereby
shall be required to approve any amendment or proposal specified in clauses (1)
- - (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section VIII.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section VIII.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of
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this Agreement for all purposes; and every Holder of Certificates theretofore or
thereafter authenticated, executed on behalf of the Holders and delivered
hereunder, shall be bound thereby.
Section VIII.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section IX.1. Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any other
Person or sell, assign, transfer, lease or convey all or substantially all of
its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form reasonably satisfactory to the Agent and the
Collateral Agent, executed and delivered to the Agent and the Collateral Agent
by such corporation, and (ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale, assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of the Securities
or under the Pledge Agreement.
Section IX.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Arvin Industries, Inc., any
or all of the Certificates evidencing Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Agent; and, upon the order of such successor
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corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Certificates which previously
shall have been signed and delivered by the officers of the Company to the Agent
for authentication and execution, and any Certificate evidencing Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Certificates issued shall in
all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
Section IX.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
Covenants
Section X.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section X.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of a Corporate PIES and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders,
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notices and demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Agent of any such designation or rescission and of any
change in the location of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the Corporate Trust Office
and appoints the Agent at its Corporate Trust Office as paying agent in such
city.
Section X.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock the full number of shares of Common Stock
issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section X.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable.
Section X.5. Statements of Officers of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company (which as of the date hereof is January 2)
ending after the date hereof, an Officers' Certificate (one of the signers of
which shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company), stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions hereof, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section X.6. ERISA.
Each Holder from time to time of the Corporate PIES which is a Plan hereby
represents that its acquisition of the Corporate PIES and the holding of the
same satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of ERISA
and the Code in accordance with one or more prohibited
-55-
<PAGE>
transaction exemptions or otherwise will not result in a nonexempt prohibited
transaction.
-56-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BANK UNITED CORP.,
a Delaware corporation,
By: _______________________________
Name:
Title:
[__________________________], as
Purchase Contract Agent
By: _______________________________
Name:
Title:
-57-
<PAGE>
EXHIBIT A
FACE OF CORPORATE PIES CERTIFICATE
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
NO. _______ CUSIP NO. [____________]
NUMBER OF CORPORATE PIES ________
BANK UNITED CORP.
CORPORATE PIES
This Corporate PIES Certificate certifies that Cede & Co. is the
registered Holder of the number of Corporate PIES set forth above. Each
Corporate PIES consists of (i) the beneficial ownership by the Holder of one
share of Series B Preferred Stock (the "Share") of Bank United Corp., a Delaware
corporation (the "Company"), having a liquidation preference of $50, subject to
the Pledge of such Share by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Share constituting part of each
Corporate PIES evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to
<PAGE>
secure the obligations of the Holder under the Purchase Contract comprising a
portion of such Corporate PIES.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Shares or cash dividends on any Pledged
Shares (as defined in the Pledge Agreement) constituting part of the Corporate
PIES received by the Securities Intermediary shall be paid by wire transfer in
same day funds (i) in the case of (A) cash dividends with respect to Pledged
Shares and (B) any payments of the liquidation preference with respect to any
Share or security entitlements thereto that have been released from the Pledge
pursuant to the Pledge Agreement, to the Agent to the account designated by the
Agent, no later than 12:00 p.m., New York City time, on the Business Day such
payment is received by the Securities Intermediary (PROVIDED that in the event
such payment is received by the Securities Intermediary on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day) and (ii) in the case of Proceeds from the
Remarketing with respect to any of the Pledged Shares or security entitlements
thereto, to the Company on the Purchase Contract Settlement Date (as described
herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Corporate PIES
of which such Pledged Shares are a part under the Purchase Contracts forming a
part of such Corporate PIES. Dividends on any Share forming part of a Corporate
PIES evidenced hereby, which is payable quarterly in arrears on
[_______________], [_______________], [_______________] and [_______________] of
each year, commencing [_______________], 1999 (a "Payment Date"), shall, subject
to receipt thereof by the Agent from the Securities Intermediary, be paid to the
Person in whose name this Corporate PIES Certificate (or a Predecessor Corporate
PIES Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on
[__________], 2002 (the "Purchase Contract Settlement Date"), at a price equal
to $50 in cash (the "Stated Amount"), a number of Common Shares, par value $0.01
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Corporate PIES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by separate cash or by application of payment
received, pursuant to the Remarketing, in respect of the liquidation preference
with respect to any Pledged Shares pledged to secure the obligations under such
Purchase Contract of the Holder of the Corporate PIES of which such Purchase
Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a Corporate PIES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to (a) if a Reset Transaction has not
occurred, [___]% per annum of the Stated Amount or (b) following the occurrence
of a Reset Transaction, the Adjusted Contract Adjustment Payment Rate related to
such Reset Transaction until any such succeeding Reset
A-2
<PAGE>
Transaction shall occur (computed on the basis of (i) for any full quarterly
period, a 360-day year of twelve 30-day months and (ii) for any period shorter
than a full quarterly period, a 30-day month and for periods less than a month,
the actual number of days elapsed per 30-day period). Such Contract Adjustment
Payments shall be payable to the Person in whose name this Corporate PIES
Certificate (or a Predecessor Corporate PIES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Dividends on the Shares and Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Corporate PIES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Corporate PIES Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
BANK UNITED CORP.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: [_____________________________]
not individually but solely as
Attorney-in-Fact of such Holder
By: _______________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate PIES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: [______________________________]
as Purchase Contract Agent
By: _______________________________
Authorized Officer
A-4
<PAGE>
(FORM OF REVERSE OF CORPORATE PIES CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of August [___], 1999 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and
[_______________________________], as Purchase Contract Agent (including its
successors hereunder, the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the terms upon
which the Corporate PIES Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $[_______] (the "Threshold
Appreciation Price"), [__________] shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold Appreciation Price
but is greater than $[_______] the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to $[________],
[________] shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional shares
of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Corporate PIES to purchase at the Purchase Price, and the Company to sell, a
number of newly issued shares of Common Stock equal to the Early Settlement Rate
or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 Trading Days ending on the third Trading
Day immediately preceding the Purchase Contract Settlement Date. The "Closing
Price" of the Common Stock on any date of determination means (i) the closing
sale price (or, if no closing price is reported, the last reported sale price)
of the Common Stock on the Nasdaq National Market on such date, (ii) if the
Common Stock is not listed for trading on the Nasdaq National Market on any such
date, the closing sale price as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, (iii) if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization or (iv) if such bid price is not
available, the average of the mid-point of the last bid and ask prices of the
Common Stock on
A-5
<PAGE>
such date from at least three nationally recognized independent investment
banking firms retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Corporate PIES Certificate may pay the Purchase Price for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby by
effecting a Cash Settlement or an Early Settlement or a remarketing of the
related Pledged Shares. A Holder of Corporate PIES who does not effect, on or
prior to 11:00 a.m. New York City time on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, an effective Cash Settlement or
an Early Settlement, shall pay the Purchase Price for the shares of Common Stock
to be issued under the related Purchase Contract from the proceeds of the sale
of the related Pledged Shares held by the Collateral Agent. Such sale will be
made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
on the third Business Day prior to the Purchase Contract Settlement Date. If, as
provided in the Purchase Contract Agreement, upon the occurrence of a Failed
Remarketing the Collateral Agent, for the benefit of the Company, exercises its
rights as a secured creditor with respect to the Pledged Shares related to this
Corporate PIES certificate, any accrued and unpaid dividends on such Pledged
Shares will become payable by the Company to the holder of this Corporate PIES
Certificate in the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Agent and to the Holders, at their addresses as they
appear in the Corporate PIES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Share forming
a part of each Corporate PIES from the Pledge. A Corporate PIES shall thereafter
represent the right to receive the Share forming a part of such Corporate PIES
in accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Shares. Upon receipt of notice of any meeting at which holders of Shares are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Shares, the Agent shall, as soon as practicable thereafter, mail to
the Corporate PIES Holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Corporate PIES
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining
A-6
<PAGE>
the holders of Shares entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Shares constituting a
part of such Holder's Corporate PIES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Corporate PIES
Holders on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Shares as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate PIES, the Agent shall abstain from
voting the Shares evidenced by such Corporate PIES.
The Corporate PIES Certificates are issuable only in registered form and
only in denominations of a single Corporate PIES and any integral multiple
thereof. The transfer of any Corporate PIES Certificate will be registered and
Corporate PIES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate PIES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder who elects to
substitute a Treasury Security for Shares, thereby creating Treasury PIES, shall
be responsible for any fees or expenses payable in connection therewith. Except
as provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying a Corporate PIES remains in effect, such Corporate PIES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate PIES in respect of the Share and
Purchase Contract constituting such Corporate PIES may be transferred and
exchanged only as a Corporate PIES. The holder of a Corporate PIES may
substitute for the Pledged Shares securing its obligation under the related
Purchase Contract Treasury Securities in an aggregate principal amount equal to
the aggregate principal amount of the Pledged Shares in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, the Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase Contract shall be
referred to as a "Treasury PIES." A Holder may make such Collateral Substitution
only in integral multiples of 20 Corporate PIES for 20 Treasury PIES. Such
Collateral Substitution may cause the equivalent aggregate principal amount of
this Certificate to be increased or decreased; PROVIDED, HOWEVER, this Corporate
PIES Certificate shall not represent more than ____ Corporate PIES. All such
adjustments to the equivalent aggregate principal amount of this Corporate PIES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Treasury PIES may recreate Corporate PIES by delivering to the
Securities Intermediary Shares with an aggregate liquidation preference equal to
the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Corporate PIES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record
A-7
<PAGE>
Date for such Payment Date. Contract Adjustment Payments will be payable at the
office of the Agent in The City of New York or, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such address as it
appears on the Corporate PIES Register.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall promptly
but in no event later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and the Holders, at their addresses as they
appear in the Corporate PIES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Shares from the Pledge
in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early (an "Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Corporate
PIES Certificate, the Holder of this Corporate PIES Certificate shall deliver
this Corporate PIES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments payable
on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Shares underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Corporate PIES as to which Early Settlement is effected equal to the
Early Settlement Rate. The Early Settlement Rate shall initially be equal
to[_______] shares of Common Stock and shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Corporate PIES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Corporate
PIES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
A-8
<PAGE>
The Holder of this Corporate PIES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Corporate PIES evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
his obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Purchase Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Shares underlying this
Corporate PIES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, Proceeds from the Remarketing with respect to any of the Pledged Shares
or security entitlements thereto in respect of the aggregate liquidation
preference of the Pledged Shares on the Purchase Contract Settlement Date shall
be paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Corporate PIES Certificate is
registered as the owner of the Corporate PIES evidenced hereby for the purpose
of receiving payments of dividends payable quarterly on the Shares, receiving
payments of Contract Adjustment Payments, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
A-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ---------------Custodian---------------
(cust) (minor)
Under Uniform Gifts to Minors Act of ________
_____________________________________
TEN ENT - as tenants by the entireties
as joint tenants with right of
JT TEN - survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
_______________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said Corporate PIES Certificates on the books of Bank
United Corp. with full power of substitution in the premises.
Dated: ___________________ ________________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as it appears upon
the face of the within Corporate PIES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee: ___________________________________
A-10
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Corporate PIES evidenced
by this Corporate PIES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _______________________ ________________________________________
Signature
Signature Guarantee: ___________________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person REGISTERED HOLDER
other than the Holder, please (i)
print such Person's name and address
and (ii) provide a guarantee of your
signature:
Please print name and address of
Registered Holder:
_____________________________________ _____________________________________
Name Name
_____________________________________ _____________________________________
Address Address
_____________________________________ _____________________________________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-11
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate PIES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Corporate PIES evidenced by this Corporate
PIES Certificate specified below. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Corporate PIES Certificate representing any
Corporate PIES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. Pledged
Shares deliverable upon such Early Settlement will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ______________________ ___________________________________
Signature
Signature Guarantee: _____________________________________
A-12
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Corporate REGISTERED HOLDER
PIES Certificates are to be registered
in the name of and delivered to, and
Pledged Shares are to be transferred
to, a Person other than the Holder,
please print such Person's name and
address:
Please print name and address of
Registered Holder:
_____________________________________ _____________________________________
Name Name
_____________________________________ _____________________________________
Address Address
_____________________________________ _____________________________________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-13
<PAGE>
Transfer Instructions for Pledged Shares Transferable Upon Early Settlement
or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-14
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
NUMBER OF
AMOUNT OF AMOUNT OF PIES
DECREASE IN INCREASE IN EVIDENCED BY
NUMBER OF NUMBER OF THIS SIGNATURE OF
PIES PIES GLOBAL AUTHORIZED
EVIDENCED BY EVIDENCED BY CERTIFICATE OFFICER OF
THE THE FOLLOWING SUCH TRUSTEE OR
GLOBAL GLOBAL DECREASE OR SECURITIES
DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN
- --------------------------------------------------------------------------------
A-15
<PAGE>
EXHIBIT B
FACE OF TREASURY PIES CERTIFICATE
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
NO. _____ CUSIP NO. [___________]
NUMBER OF TREASURY PIES _________
BANK UNITED CORP.
TREASURY PIES
This Treasury PIES Certificate certifies that Cede & Co. is the registered
Holder of the number of Treasury PIES set forth above. Each Treasury PIES
consists of (i) a 1/20 undivided beneficial ownership interest of a Treasury
Security having a principal amount at maturity equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Bank United Corp., a Delaware corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
<PAGE>
Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Treasury PIES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Treasury PIES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company, to sell, on
[____________], 2002 (the "Purchase Contract Settlement Date"), at a price equal
to $50 in cash (the "Stated Amount"), a number of Common Shares, par value $0.01
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Treasury PIES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of the Proceeds from the Treasury Securities
pledged to secure the obligations under such Purchase Contract in accordance
with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to (a) if a Reset Transaction has not occurred, [____]% per annum of the Stated
Amount or (b) following the occurrence of a Reset Transaction, the Adjusted
Contract Adjustment Payment Rate related to such Reset Transaction until any
such succeeding Reset Transaction shall occur (computed on the basis of (i) for
any full quarterly period, a 360-day year of twelve 30-day months and (ii) for
any period shorter than a full quarterly period, a 30-day month and for periods
less than a month, the actual number of days elapsed per 30-day period), as the
case may be. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury PIES Certificate (or a Predecessor Treasury PIES
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent in
The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Treasury
PIES Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Treasury PIES Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
B-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
BANK UNITED CORP.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [___________________________],
not individually but solely as
Attorney-in-Fact of such Holder
By: _______________________________
Name:
Title:
Dated:
B-3
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury PIES referred to in the within-mentioned
Purchase Contract Agreement.
By: [_______________________], as
Purchase Contract Agent
By: ____________________________
Authorized Officer
B-4
<PAGE>
(REVERSE OF TREASURY PIES CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of August [___], 1999 (as may be supplemented from time to
time, the "Purchase Contract Agreement") between the Company and
[_____________________], as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the terms
upon which the Treasury PIES Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $[_________] (the "Threshold
Appreciation Price"), [_________] shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold Appreciation Price
but is greater than $[_________], the number of shares of Common Stock per
Purchase Contract equal to the Stated Amount divided by the Applicable Market
Value and (c) if the Applicable Market Amount is less than or equal to
$[_________], then [_________] shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Treasury PIES to purchase at the Purchase Price for cash, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the 20 Trading Days ending on the third Trading
Day immediately preceding the Purchase Contract Settlement Date. The "Closing
Price" of the Common Stock on any date of determination means the (i) closing
sale price (or, if no closing price is reported, the last reported sale price)
of the Common Stock on the Nasdaq National Market on such date, (ii) if the
Common Stock is not listed for trading on the Nasdaq National Market on any such
date, the closing sale price as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, (iii) if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization or (iv) if such bid price is not
available, the average of the mid-point of the last bid and ask prices of the
Common Stock on such date from at least three nationally recognized independent
investment banking firms retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or
B-5
<PAGE>
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Treasury PIES shall pay the Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby either by
effecting a Cash Settlement or an Early Settlement of each such Purchase
Contract or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Treasury PIES equal to the Stated Amount of such
Purchase Contract to the purchase of the Common Stock. A Holder of Treasury PIES
who does not effect, on or prior to 11:00 a.m. New York City time on the
Business Day immediately preceding the Purchase Contract Settlement Date, an
effective Cash Settlement or an Early Settlement, shall pay the Purchase Price
for the shares of Common Stock to be issued under the related Purchase Contract
from the proceeds of the Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Agent and to the Holders, at their addresses as they
appear in the Treasury PIES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Treasury
PIES. A Treasury PIES shall thereafter represent the right to receive the
interest in the Treasury Security forming a part of such Treasury PIES, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
The Treasury PIES Certificates are issuable only in registered form and
only in denominations of a single Treasury PIES and any integral multiple
thereof. The transfer of any Treasury PIES Certificate will be registered and
Treasury PIES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury PIES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Shares for
Treasury Securities, thereby recreating Corporate PIES, shall be responsible for
any fees or expenses associated therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying a Treasury
PIES remains in effect, such Treasury PIES shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Treasury
PIES in respect of the Treasury Security and the Purchase Contract constituting
such Treasury PIES may be transferred and exchanged only as a Treasury PIES. A
Holder of Treasury PIES may recreate Corporate PIES by delivering to the
Collateral Agent Shares with a liquidation preference equal to the aggregate
principal
B-6
<PAGE>
amount at maturity of the Pledged Treasury Securities in exchange for the
release of such Pledged Treasury Securities in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Holder's Security shall be referred to as an "Corporate PIES."
Such substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; PROVIDED, HOWEVER, this Treasury PIES
Certificate shall not represent more than ____ Treasury PIES. All such
adjustments to the equivalent aggregate principal amount of this Treasury PIES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of a Corporate PIES may recreate a Treasury PIES by delivering to
the Collateral Agent Treasury Securities in an aggregate principal amount equal
to the aggregate liquidation preference of the Pledged Shares in exchange for
the release of such Pledged Shares in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. Any such recreation of a Treasury
PIES may be effected only in multiples of 20 Corporate PIES for 20 Treasury
PIES.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury PIES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent in The
City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such address as it appears on the
Treasury PIES Register.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall promptly
but in no event later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and the Holders, at their addresses as they
appear in the Treasury PIES Register. Upon the occurrence of a Termination
Event, the Collateral Agent shall release the Treasury Securities from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early (an "Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Treasury
PIES the Holder of this Treasury PIES Certificate shall deliver this Treasury
PIES Certificate to the Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of Election to Settle Early
set forth below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "Early Settlement Amount") equal to (i) the product of (A) $50 times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date for any Payment Date to the opening of
B-7
<PAGE>
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable, if any, on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Treasury Securities underlying such Securities
shall be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of shares of Common Stock on
account of each Purchase Contract forming part of a Treasury PIES as to which
Early Settlement is effected equal to [_________] shares of Common Stock per
Purchase Contract (the "Early Settlement Rate"). The Early Settlement Rate shall
be adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Treasury PIES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Treasury
PIES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Treasury PIES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Treasury PIES evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Purchase Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Treasury PIES Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the aggregate principal
amount of the Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Treasury PIES Certificate is
registered as the owner of the Treasury PIES evidenced hereby for the purpose of
receiving payments of interest on the Treasury Securities, receiving payments of
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in
B-8
<PAGE>
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice to
the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
B-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ---------------Custodian---------------
(cust) (minor)
Under Uniform Gifts to Minors Act of ________
_______________________________________
TEN ENT - as tenants by the entireties
as joint tenants with right of
JT TEN - survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
_______________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said Treasury PIES Certificates on the books of Bank United
Corp. with full power of substitution in the premises.
Dated: ___________________ ________________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as it appears upon
the face of the within Treasury PIES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee: ___________________________________
B-10
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Treasury PIES evidenced
by this Treasury PIES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _______________________ _______________________________________
Signature
Signature Guarantee: __________________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please (i)
print such Person's name and address
and (ii) provide a guarantee of your
signature:
Please print name and address of
Registered Holder:
_____________________________________ _____________________________________
Name Name
_____________________________________ _____________________________________
Address Address
_____________________________________ _____________________________________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
B-11
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury PIES Certificate irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Treasury PIES evidenced by this Treasury PIES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Treasury PIES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Treasury PIES Certificate representing any Treasury PIES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ______________________ ______________________________________
Signature
Signature Guarantee: _____________________________________
B-12
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock of Treasury REGISTERED HOLDER
PIES Certificates are to be registered
in the name of and delivered to and
Pledged Treasury Securities are to be
transferred to a Person other than the
Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
_____________________________________ _____________________________________
Name Name
_____________________________________ _____________________________________
Address Address
_____________________________________ _____________________________________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
B-13
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
NUMBER OF
AMOUNT OF AMOUNT OF PIES
DECREASE IN INCREASE IN EVIDENCED BY
NUMBER OF NUMBER OF THIS SIGNATURE OF
PIES PIES GLOBAL AUTHORIZED
EVIDENCED BY EVIDENCED BY CERTIFICATE OFFICER OF
THE THE FOLLOWING SUCH TRUSTEE OR
GLOBAL GLOBAL DECREASE OR SECURITIES
DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
[____________________________]
Attention:
Re: ________ PIES of Bank United Corp. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
[_________________], as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate liquidation preference of [Shares] [Treasury
Securities] in exchange for the [Pledged Shares] [Pledged Treasury Securities]
held in the Collateral Account, in accordance with the Pledge Agreement, dated
as of August [___], 1999 (the "Pledge Agreement"; unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined
therein), among you, the Company, the Collateral Agent and the Securities
Intermediary. The undersigned Holder has paid all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Shares] [Pledged Treasury Securities] related to such [Corporate PIES]
[Treasury PIES].
Date: _______________________ ______________________________________
Signature
Signature Guarantee:__________________
Please print name and address of Registered Holder:
___________________________________ ______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
___________________________________
___________________________________
___________________________________
<PAGE>
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_________________
_________________
Attention:
Telecopy: __________
Re: __________ PIES of BANK UNITED CORP.
(the "Company")
Please refer to the Purchase Contract Agreement, dated as of August [___],
1999 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
among the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of PIES from time to time.
We hereby notify you that a Termination Event has occurred and that [the
Shares][the Treasury Securities] underlying your ownership interest in _____
[Corporate PIES][Treasury PIES] have been released and are being held by us for
your account pending receipt of transfer instructions with respect to such
[Shares][Treasury Securities] (the "Released Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Corporate
PIES][Treasury PIES] effected through book-entry or by delivery to us of your
[Corporate PIES Certificate][Treasury PIES Certificate], we shall transfer the
Released Securities by book-entry transfer, or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any [dividends] [interest] thereon,
shall be held in our name, or a nominee in trust for your benefit, until such
time as such [Corporate PIES][Treasury PIES] are transferred or your [Corporate
PIES Certificate][Treasury PIES Certificate] is surrendered or satisfactory
evidence is provided that your [Corporate PIES Certificate][Treasury PIES
Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.
Date: _______________________ By: [______________________________]
______________________________
Name:
Title:
D-1
<PAGE>
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
[_________________________]
Attention:
Re: ________ PIES of Bank United Corp.
(the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.4 of the Purchase Contract Agreement, dated as of August [___], 1999
(the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Securities Intermediary for deposit in the Collateral
Account, on or prior to 11:00 a.m. New York City time, on the [fifth Business
Day][Business Day] immediately preceding the Purchase Contract Settlement Date
(in lawful money of the United States by certified or cashiers' check or wire
transfer, in immediately available funds), $______ as the Purchase Price for the
shares of Common Stock issuable to such Holder by the Company under the related
Purchase Contract on the Purchase Contract Settlement Date. The undersigned
Holder hereby instructs you to notify promptly the Collateral Agent of the
undersigned Holder's election to make such cash settlement with respect to the
Purchase Contracts related to such Holder's [Corporate PIES] [Treasury PIES].
Date: _______________________ ________________________________________
Signature
Signature Guarantee:____________________
Please print name and address of Registered Holder:
<PAGE>
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Payment of Purchase Contract Settlement Price)
[____________________________
Attention:
Telecopy:
[____________________________
Attention:
Telecopy:
Re: __________ PIES of Bank United Corp.
(the "Company")
Please refer to the Purchase Contract Agreement dated as of August [___],
1999 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of PIES from time to time.
In accordance with Section 5.4 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of Corporate
PIES as of 11:00 a.m, [DATE (FIFTH BUSINESS DAY IMMEDIATELY PRECEDING THE
PURCHASE CONTRACT SETTLEMENT DATE)], we hereby notify you that [_____ Shares]
are to be tendered for purchase in the Remarketing.
Date: ______________________ By: [_____________________________]
____________________________
Name:
Title:
F-1
<PAGE>
================================================================================
DRAFT 8/2/99
BANK UNITED CORP.
AND
[______________________________],
As Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of August [___], 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS................................................................. 1
ARTICLE IDefinitions and Other Provisionsof General Applications
Section 1.1. Definitions................................................. 1
Section 1.2. Compliance Certificates and Opinions........................ 10
Section 1.3. Form of Documents Delivered to Agent........................ 11
Section 1.4. Acts of Holders; Record Dates............................... 12
Section 1.5. Notices..................................................... 13
Section 1.6. Notice to Holders; Waiver................................... 14
Section 1.7. Effect of Headings and Table of Contents.................... 14
Section 1.8. Successors and Assigns...................................... 14
Section 1.9. Separability Clause......................................... 14
Section 1.10.Benefits of Agreement....................................... 15
Section 1.11.Governing Law............................................... 15
Section 1.12.Legal Holidays.............................................. 15
Section 1.13.Counterparts................................................ 15
Section 1.14.Inspection of Agreement..................................... 15
ARTICLE IICertificate Forms
Section 2.1. Forms of Certificates Generally............................. 16
Section 2.2. Form of Agent=s Certificate of Authentication............... 17
ARTICLE IIIThe Securities
Section 3.1. Amount; Form and Denominations.............................. 17
Section 3.2. Rights and Obligations Evidenced by the Certificates........ 17
Section 3.3. Execution, Authentication, Delivery and Dating.............. 18
Section 3.4. Temporary Certificates...................................... 19
Section 3.5. Registration; Registration of Transfer and Exchange......... 20
Section 3.6. Book-Entry Interests........................................ 21
Section 3.7. Notices to Holders.......................................... 21
Section 3.8. Appointment of Successor Clearing Agency.................... 21
Section 3.9. Definitive Certificates..................................... 22
Section 3.10.Mutilated, Destroyed, Lost and Stolen Certificates.......... 22
Section 3.11.Persons Deemed Owners....................................... 23
Section 3.12.Cancellation................................................ 23
Section 3.13.Substitution of Securities.................................. 24
Section 3.14.Reestablishment of Corporate PIES........................... 25
Section 3.15.Transfer of Collateral upon Occurrence of Termination Event. 26
Section 3.16.No Consent to Assumption.................................... 26
ARTICLE IVThe Shares
Section 4.1. Payment of Dividends; Rights to Dividends Preserved;
Dividend Rate Reset......................................... 27
Section 4.2. Notice and Voting........................................... 28
ARTICLE VThe Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.......................... 28
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Section 5.2. Contract Adjustment Payments................................ 30
Section 5.3. [Intentionally omitted]..................................... 30
Section 5.4. Payment of Purchase Price................................... 30
Section 5.5. Issuance of Shares of Common Stock.......................... 34
Section 5.6. Adjustment of Settlement Rate............................... 35
Section 5.7. Notice of Adjustments and Certain Other Events.............. 40
Section 5.8. Termination Event; Notice................................... 40
Section 5.9. Early Settlement............................................ 41
Section 5.10.No Fractional Shares........................................ 42
Section 5.11.Charges and Taxes........................................... 42
ARTICLE VIRemedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock....................... 43
Section 6.2. Restoration of Rights and Remedies.......................... 43
Section 6.3. Rights and Remedies Cumulative.............................. 43
Section 6.4. Delay or Omission Not Waiver................................ 43
Section 6.5. Undertaking for Costs....................................... 44
Section 6.6. Waiver of Stay or Extension Laws............................ 44
ARTICLE VIIThe Agent
Section 7.1. Certain Duties and Responsibilities......................... 44
Section 7.2. Notice of Default........................................... 45
Section 7.3. Certain Rights of Agent..................................... 45
Section 7.4. Not Responsible for Recitals or Issuance of Securities...... 46
Section 7.5. May Hold Securities......................................... 46
Section 7.6. Money Held in Custody....................................... 46
Section 7.7. Compensation and Reimbursement.............................. 47
Section 7.8. Corporate Agent Required; Eligibility....................... 47
Section 7.9. Resignation and Removal; Appointment of Successor........... 47
Section 7.10.Acceptance of Appointment by Successor...................... 49
Section 7.11.Merger, Conversion, Consolidation or Succession to Business. 49
Section 7.12.Preservation of Information; Communications to Holders...... 49
Section 7.13.No Obligations of Agent..................................... 50
Section 7.14.Tax Compliance.............................................. 50
ARTICLE VIIISupplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.......... 51
Section 8.2. Supplemental Agreements With Consent of Holders............. 51
Section 8.3. Execution of Supplemental Agreements........................ 52
Section 8.4. Effect of Supplemental Agreements........................... 53
Section 8.5. Reference to Supplemental Agreements........................ 53
ARTICLE IXConsolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.................... 53
Section 9.2. Rights and Duties of Successor Corporation.................. 53
Section 9.3. Opinion of Counsel Given to Agent........................... 54
ARTICLE XCovenants
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Section 10.1.Performance Under Purchase Contracts........................ 54
Section 10.2.Maintenance of Office or Agency............................. 54
Section 10.3.Company to Reserve Common Stock............................. 55
Section 10.4.Covenants as to Common Stock................................ 55
Section 10.5.Statements of Officers of the Company as to Default......... 55
Section 10.6.ERISA....................................................... 55
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EXHIBIT A Form of Corporate PIES Certificate
EXHIBIT B Form of Treasury PIES Certificate
EXHIBIT C Instruction to Purchase Contract Agent
EXHIBIT D Notice from Purchase Contract Agent to Holders (Transfer of
Collateral upon Occurrence of a Termination Event)
EXHIBIT E Notice to Settle by Separate Cash
EXHIBIT F Notice from Purchase Contract Agent to Collateral Agent
(Payment of Purchase Contract Settlement Price)
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EXHIBIT 4.15
FORM OF PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of August [__], 1999 among BANK UNITED CORP., a
Delaware corporation (the "Company"), [________________________], not
individually but solely as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent"),
[________________________], not individually but solely in its capacity as a
securities intermediary with respect to the Collateral Account (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary"), and [____________________], a [___________________], not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders from time to time of the Securities (in such capacity, together with
its successors in such capacity, the "Purchase Contract Agent") under the
Purchase Contract Agreement (as defined herein).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 2,300,000 PIES (the "Securities").
Each Corporate PIES, at issuance, consists of a unit comprised of (a) one
stock purchase contract (each, a "Purchase Contract") under which (i) the Holder
will purchase from the Company on [_________], 2002, for an amount equal to $50
(the "Stated Amount"), a number of shares of Common Stock equal to the
Settlement Rate and (ii) the Company will pay the Holder Contract Adjustment
Payments, if any, and (b) a share of Series B Preferred Stock of the Company
(each a "Share"), having a liquidation preference equal to the Stated Amount and
being subject to mandatory redemption on [________], 2004.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral Account to secure the
Obligations.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
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2
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(c) the following terms which are defined in the Code shall have the
meanings set forth therein: "certificated security," "control," "financial
asset," "entitlement order," "securities account" and "security entitlement";
(d) the following terms have the meanings assigned to them in the Purchase
Contract Agreement: (1) Act, (2) Agent, (3) Board Resolution, (4) Cash
Settlement, (5) Certificate, (6) Common Stock, (7) Contract Adjustment Payments,
(8) Corporate PIES, (9) Early Settlement, (10) Early Settlement Amount, (11)
Early Settlement Date, (12) Holder, (13) Opinion of Counsel, (14) Outstanding
Securities, (15) PIES, (16) Purchase Contract, (17) Purchase Contract Settlement
Date, (18) Purchase Price, (19) Remarketing Agent, (20) Remarketing Agreement,
(21) Settlement Rate, (22) Shares, (23) Termination Event, (24) Treasury PIES
and (25) Underwriting Agreement; and
(e) the following terms have the meanings given to them in this section
1(e):
"AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed for business.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"CODE" means the Uniform Commercial Code as in effect in the State of
New York from time to time.
"COLLATERAL ACCOUNT" means the collective reference to (1) Securities
Account No. [_____] entitled "[__________________], as Collateral Agent,
Securities Account ([___________])" maintained by the Securities Intermediary
for the Purchase Contract Agent on behalf of and as attorney-in-fact for the
Holders, (2) all investment property and other financial assets from time to
time credited to the Collateral Account, including, without limitation, (A)
Shares and security entitlements relating thereto which are a component of the
Corporate PIES from time to time, (B) any Treasury Securities and security
entitlements relating thereto delivered from time to time upon establishment of
Treasury PIES in accordance with Section 5.2 hereof and (C) payments made by
Holders pursuant to Section 5.5 hereof (collectively, the
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3
"Collateral"), (3) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any applicable
bankruptcy, insolvency or other similar law, by or against the pledgor or with
respect to the pledgor) and (4) all powers and rights now owned or hereafter
acquired under or with respect to the Collateral Account.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"FAILED REMARKETING" has the meaning specified in Section 5.4(b) of the
Purchase Contract Agreement.
"OBLIGATIONS" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract and this Agreement or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Company or the Collateral Agent or
the Securities Intermediary that are required to be paid by the Holder pursuant
to the terms of any of the foregoing agreements).
"PERMITTED INVESTMENTS" means any one of the following which shall mature
not later than the next succeeding Business Day: (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support of the timely payment thereof or
such indebtedness constitutes a general obligation of it); (ii) deposits,
certificates of deposit or acceptances with an original maturity of 365 days or
less of any institution which is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $200.0
million at the time of deposit; (iii) investments with an original maturity of
365 days or less of any Person that are fully and unconditionally guaranteed by
a bank referred to in clause (ii); (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed as to timely payment by the full faith and credit of
the United States Government; (v) investments in commercial paper, other than
commercial paper issued by the Company or its affiliates, of any corporation
incorporated under the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least equal to "A-1" by
Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by Moody's
Investors Service, Inc. ("Moody's"); and (vi) investments in money market funds
registered under the Investment Company Act of 1940, as amended, rated in the
highest applicable rating category by S&P or Moody's.
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4
"PERSON" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"PLEDGE" means the lien and security interest created by this Agreement.
"PLEDGED SHARES" means the Shares and security entitlements with
respect thereto from time to time credited to the Collateral Account and not
then released from the Pledge.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the Code and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in ss. 8-102(a)(9) of the Code) and other property
received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"TRANSFER" means:
(a) in the case of certificated securities in registered form, delivery as
provided in ss. 8-301(a) of the Code, indorsed to the transferee or in blank by
an effective indorsement;
(b) in the case of Treasury Securities, registration of the transferee as
the owner of such Treasury Securities on TRADES; and
(c) in the case of security entitlements, including, without limitation,
security entitlements with respect to Treasury Securities, a securities
intermediary indicating by book entry that such security entitlement has been
credited to the transferee's securities account.
"TREASURY SECURITY" means a zero-coupon U.S. Treasury Security (Cusip
Number ________) which are the principal strips of the __% U.S. Treasury
Securities which mature on _____ ___, 2002.
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5
"VALUE" with respect to any item of Collateral on any date means, as to
(i) Cash, the face amount thereof, (ii) Treasury Securities, the aggregate
principal amount thereof at maturity and (iii) Shares, [the liquidation
preference thereof].
Section 2. PLEDGE.
Section 2.1 PLEDGE. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of set off
against, all of such Holder's right, title and interest in and to the Collateral
Account to secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations.
The Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the Code, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
Section 2.2 CONTROL; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement.
(b) On the date of initial issuance of the Securities, the Purchase
Contract Agent shall deliver to the Collateral Agent a financing statement
prepared by the Company for filing in the Office of the Secretary of State of
the State of [New York], signed by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as debtors, and describing the Collateral.
Section 2.3 TERMINATION. This Agreement and the Pledge created hereby
shall terminate, with respect to a Holder, upon the satisfaction of such
Holder's Obligations. Upon termination, the Securities Intermediary shall
Transfer the Collateral to the Purchase Contract Agent for distribution to the
Holders in accordance with their respective interests, free and clear of any
lien, pledge or security interest created hereby.
Section 3. DISTRIBUTIONS ON PLEDGED COLLATERAL.
Section 3.1 INCOME DISTRIBUTIONS. All income distributions, including
dividends, received by the Securities Intermediary on account of the Shares or
Permitted Investments from time to time held in the Collateral Account shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders as provided in the Purchase Contracts.
Section 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All payments
received by the Securities Intermediary following a Termination Event of (1) the
principal amount of Pledged Shares or securities entitlements thereto or (2) the
principal amount of the Pledged Treasury Securities or securities entitlements
thereto shall be distributed to the Purchase Contract
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6
Agent for the benefit of the Holders for distribution to such Holders in
accordance with their respective interests.
Section 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT SETTLEMENT
DATE. (a) Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the liquidation preference with
respect to the Pledged Shares or security entitlements thereto or (2) the
principal amount of Pledged Treasury Securities or security entitlements thereto
shall be held and invested in Permitted Investments until the Purchase Contract
Settlement Date and on the Purchase Contract Settlement Date distributed to the
Company as provided in Section 5.7 hereof. Any balance remaining in the
Collateral Account shall be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.
(b) All payments received by the Securities Intermediary of (1) the
liquidation preference of Shares or security entitlements thereto or (2) the
principal amount of Treasury Securities or security entitlements thereto that in
each case have been released from the Pledge shall be distributed to the
Purchase Contract Agent for the benefit of the Holders to be distributed to such
Holders in accordance with their respective interests.
Section 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT. Payments to the Purchase
Contract Agent hereunder shall be made to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m., New York City time,
on the Business Day such payment is received by the Securities Intermediary;
PROVIDED, HOWEVER, that if such payment is received on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day.
Section 3.5 ASSETS NOT PROPERLY RELEASED. If the Purchase Contract Agent
or any Holder shall receive any payments of the liquidation amount or principal
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate (as defined
in the Purchase Contract Agreement) of the Company so directing, promptly
deliver the same to the Securities Intermediary for credit to the Collateral
Account or to the Company for application to the obligations of the Holders
under the related Purchase Contracts, and the Purchase Contract Agent and
Holders shall acquire no right, title or interest in any such payments of
liquidation or principal amounts so received.
Section 4. CONTROL.
Section 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities
Intermediary hereby confirms that (a) the Securities Intermediary has
established the Collateral Account, (b) the Collateral Account is a securities
account, (c) subject to the terms of this Agreement, the Securities Intermediary
shall treat the Purchase Contract Agent as entitled to exercise the rights
<PAGE>
7
that comprise any financial asset credited to the Collateral Account, (d) all
property delivered to the Securities Intermediary pursuant to this Agreement or
the Purchase Contract Agreement will be credited promptly to the Collateral
Account and (e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary, or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary, and in no case will any financial asset credited to the Collateral
Account be registered in the name of the Purchase Contract Agent or any Holder,
payable to the order of the Purchase Contract Agent or any Holder or specially
indorsed to the Purchase Contract Agent or any Holder.
Section 4.2 TREATMENT AS FINANCIAL ASSETS. Each item of property (whether
investment property, financial asset, security, instrument or cash) credited to
the Collateral Account shall be treated as a financial asset.
Section 4.3 SOLE CONTROL BY COLLATERAL AGENT. Except as provided in
Section 6, at all times prior to the termination of the Pledge, the Collateral
Agent shall have sole control of the Collateral Account, and the Securities
Intermediary shall take instructions and directions with respect to the
Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.
Section 4.4 SECURITIES INTERMEDIARY'S LOCATION. The Collateral Account and
the rights and obligations of the Securities Intermediary, the Collateral Agent,
the Purchase Contract Agent and the Holders with respect thereto shall be
governed by the laws of the State of New York. Regardless of any provision in
any other agreement, for purposes of the Code, New York shall be deemed to be
the Securities Intermediary's location, and the Collateral Account (as well as
the securities entitlements related thereto) shall be governed by the laws of
the State of New York.
Section 4.5 NO OTHER CLAIMS. Except for the claims and interest of the
Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary does not know of any claim to,
or interest in, the Collateral Account or in any financial asset credited
thereto. If any person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Collateral Account or in any financial asset carried
therein, the Securities Intermediary will promptly notify the Collateral Agent
and the Purchase Contract Agent.
Section 4.6 INVESTMENT AND RELEASE. All proceeds of financial assets from
time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
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8
Section 4.7 STATEMENTS AND CONFIRMATIONS. The Securities Intermediary will
promptly send copies of all statements, confirmations and other correspondence
concerning the Collateral Account and any financial assets credited thereto
simultaneously to each of the Purchase Contract Agent and the Collateral Agent
at their addresses for notices under this Agreement.
Section 4.8 TAX ALLOCATIONS. All items of income, gain, expense and loss
recognized in the Collateral Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the names and taxpayer
identification numbers of the Holders that are the beneficial owners thereof.
Section 4.9 NO OTHER AGREEMENTS. The Securities Intermediary has not
entered into and prior to the termination of the Pledge will not enter into any
agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
Section 4.10 POWERS COUPLED WITH AN INTEREST. The rights and powers
granted in this Section 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Section 4 shall continue in effect until the
termination of the Pledge.
Section 5. INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY PIES AND
REESTABLISHMENT OF CORPORATE PIES.
Section 5.1 INITIAL DEPOSIT OF SHARES. Prior to or concurrently with the
execution and delivery of this Agreement, the Purchase Contract Agent, on behalf
of the initial Holders of the Corporate PIES, shall Transfer to the Securities
Intermediary, for credit to the Collateral Account, the Shares or security
entitlements relating to such Shares, and the Securities Intermediary shall
indicate by book entry that a securities entitlement to such Shares has been
credited to the Collateral Account.
Section 5.2 ESTABLISHMENT OF TREASURY PIES. (a0 At any time on or prior to
the seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Corporate PIES shall have the right to establish or
reestablish Treasury PIES by substitution of Treasury Securities or security
entitlements thereto for the Pledged Shares comprising a part of such Holder's
Corporate PIES in integral multiples of 20 Corporate PIES by:
(1 Transferring to the Securities Intermediary for credit to the
Collateral Account Treasury Securities or security entitlements thereto
having a Value equal to the liquidation preference of the Pledged Shares
to be released, accompanied by a notice, substantially in the form of
Exhibit C to the Purchase Contract Agreement, whereupon
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9
the Purchase Contract Agent shall deliver to the Collateral Agent a
notice, substantially in the form of Exhibit A hereto, (A) stating that
such Holder has Transferred Treasury Securities or security entitlements
thereto to the Securities Intermediary for credit to the Collateral
Account, (B) stating the Value of the Treasury Securities or security
entitlements thereto Transferred by such Holder and (C) requesting that
the Collateral Agent release from the Pledge the Pledged Shares that are a
component of such Corporate PIES; and
(2 delivering the related Corporate PIES to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements thereto have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release such Pledged Shares from the Pledge by Transfer to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.
(b0 Upon credit to the Collateral Account of Treasury Securities or
security entitlements thereto delivered by a Holder of Corporate PIES and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Pledged Shares and shall promptly transfer the
same to the Purchase Contract Agent for distribution to such Holder, free and
clear of any lien, pledge or security interest created hereby.
Section 5.3 REESTABLISHMENT OF CORPORATE PIES. (a) At any time on or prior
to the seventh Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Treasury PIES shall have the right to reestablish
Corporate PIES by substitution of Shares or security entitlements thereto for
Pledged Treasury Securities in integral multiples of 20 Treasury PIES by:
(1 Transferring to the Securities Intermediary for credit to the
Collateral Account Shares or security entitlements thereto having a
liquidation preference equal to the Value of the Pledged Treasury
Securities to be released, accompanied by a notice, substantially in the
form of Exhibit C to the Purchase Contract Agreement, whereupon the
Purchase Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit C hereto, stating that such Holder
has Transferred Shares or security entitlements thereto to the Securities
Intermediary for credit to the Collateral Account and requesting that the
Collateral Agent release from the Pledge the Pledged Treasury Securities
related to such Treasury PIES; and
(2 delivering the related Treasury PIES to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Shares or security
entitlements thereto have been credited to the Collateral Account as described
in such notice, the Collateral Agent shall instruct the Securities Intermediary
by a notice in the form provided in Exhibit D to release such
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10
Pledged Treasury Securities from the Pledge by Transfer to the Purchase Contract
Agent for distribution to such Holder.
(b0 Upon credit to the Collateral Account of Shares or security
entitlements thereto and receipt of the related instruction from the Collateral
Agent, the Securities Intermediary shall release the applicable Pledged Treasury
Securities and shall promptly Transfer the same to the Purchase Contract Agent
for distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
Section 5.4 TERMINATION EVENT. (a) Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that a
Termination Event has occurred, the Collateral Agent shall release all
Collateral from the Pledge and shall promptly Transfer:
(1 any Pledged Shares; and
(2 any Pledged Treasury Securities
to the Purchase Contract Agent for the benefit of the Holders, for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby.
(b0 If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Shares or the Pledged Treasury Securities, as the case may be, as provided by
this Section 5.4, the Purchase Contract Agent shall:
(1 use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to the
effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section 5.4,
and shall deliver such opinion to the Collateral Agent within ten days
after the occurrence of such Termination Event, and if (A) the Purchase
Contract Agent shall be unable to obtain such opinion within ten days
after the occurrence of such Termination Event or (B) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to effectuate
the release and Transfer of all Pledged Shares, all the Pledged Treasury
Securities or the Proceeds of any of the foregoing, as the case may be, as
provided in this Section 5.4, then the Purchase Contract Agent shall
within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court having jurisdiction of the
Company's case under the Bankruptcy Code seeking an order requiring the
Collateral Agent to effectuate the release and transfer of all Pledged
Shares or all the Pledged Treasury Securities, as the case may be, as
provided by this Section 5.4; or
(2 commence an action or proceeding like that described in clause
5.4(b)(1)(B) hereof within ten days after the occurrence of such
Termination Event.
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Section 5.5 CASH SETTLEMENT. (a) Upon receipt by the Collateral Agent of
(1) a notice from the Purchase Contract Agent promptly after the receipt by the
Purchase Contract Agent of a notice that a Holder of a Corporate PIES or
Treasury PIES has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with cash and (2) payment by such Holder by deposit
in the Collateral Account on or prior to 11:00 a.m., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
in the case of Corporate PIES, and the Business Day immediately preceding the
Purchase Contract Settlement Date, in the case of the Treasury PIES, of the
Purchase Price in lawful money of the United States by certified or cashier's
check or wire transfer of immediately available funds payable to or upon the
order of the Securities Intermediary, then the Collateral Agent shall (i)
instruct the Securities Intermediary promptly to invest any such Cash in
Permitted Investments and (ii) release from the Pledge (1) Pledged Shares in the
case of a Holder of Corporate PIES, or (2) Pledged Treasury Securities in the
case of a Holder of Treasury PIES with a liquidation or principal amount equal
to the product of (x) the Stated Amount times (y) the number of such Purchase
Contracts as to which such Holders have elected to effect a cash settlement
pursuant to this Section 5.5(a) and shall instruct the Securities Intermediary
to Transfer all such Pledged Shares or Pledged Treasury Securities, as the case
may be, to the Purchase Contract Agent for the benefit of such Holders, in each
case free and clear of the Pledge created hereby, for distribution to such
Holders in accordance with their respective interests. Upon receipt of the
proceeds upon the maturity of the Permitted Investments on the Purchase Contract
Settlement Date, the Collateral Agent shall (A instruct the Securities
Intermediary to pay the portion of such proceeds and deliver any certified or
cashier's checks received, in an aggregate amount equal to the Purchase Price,
to the Company on the Purchase Contract Settlement Date, and (B) instruct the
Securities Intermediary to release any amounts in respect of the interest earned
from such Permitted Investments to the Purchase Contract Agent for distribution
to the relevant Holders in accordance with their respective interests.
(b0 If a Holder of a Corporate PIES notifies the Purchase Contract Agent
as provided in paragraph 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(a)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have consented to the disposition of the Pledged Shares of
such Holder in accordance with paragraph 5.4(a)(iii) of the Purchase Contract
Agreement.
(c0 If a Holder of a Treasury PIES notifies the Purchase Contract Agent as
provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
paragraph 5.4(d)(iii) of the Purchase Contract Agreement.
(d0 Prior to 3:00 p.m., New York City time, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the
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12
Purchase Contract Agent a notice, substantially in the form of Exhibit E hereto,
stating (i) the amount of cash that it has received with respect to the Cash
Settlement of Corporate PIES and (ii) the amount of cash that it has received
with respect to the Cash Settlement of Treasury PIES.
Section 5.6 EARLY SETTLEMENT. Upon written notice to the Collateral Agent
by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Shares, in the case of a Holder of
Corporate PIES, or (b) Pledged Treasury Securities, in the case of a Holder of
Treasury PIES, with a Value equal to the product of (i) the Stated Amount times
(ii) the number of Purchase Contracts as to which such Holders have elected to
effect Early Settlement and shall instruct the Securities Intermediary to
Transfer all such Pledged Shares or Pledged Treasury Securities, as the case may
be, to the Purchase Contract Agent for the benefit of such Holders, in each case
free and clear of the Pledge created hereby, for distribution to such Holders in
accordance with their respective interests.
Section 5.7 APPLICATION OF PROCEEDS SETTLEMENT. (a) If a Holder of
Corporate PIES has not elected to make an effective Cash Settlement by notifying
the Purchase Contract Agent in the manner provided for in Section 5.4(a)(i) in
the Purchase Contract Agreement, or has given such notice but failed to deliver
the required cash prior to 11:00 a.m., New York City time, on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contract(s) from the Proceeds of the related Pledged
Shares. In such event, the Collateral Agent shall instruct the Securities
Intermediary to Transfer the related Pledged Shares to the Remarketing Agent for
remarketing. Upon receiving such Pledged Shares, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement, will use its reasonable efforts to
remarket such Pledged Shares on such date at a price of 100.50% of the aggregate
liquidation preference of such Pledged Shares. The Remarketing Agent will
deposit in the Collateral Account the portion of the Proceeds of such
remarketing equal to 100% the aggregate liquidation preference of the remarketed
Pledged Shares and, pursuant to the Remarketing Agreement, shall retain the
portion of the Proceeds equal to 0.50% of the aggregate liquidation preference
of the remarketed Pledged Shares. On the Purchase Contract Settlement Date, the
Collateral Agent shall instruct the Securities Intermediary to apply a portion
of the Proceeds from such remarketing equal to the aggregate liquidation
preference of such Pledged Shares to satisfy in full the obligations of such
Holders of Corporate PIES to pay the Purchase Price to purchase the Common Stock
under the related Purchase Contracts. The balance of the Proceeds from such
remarketing on deposit in the Collateral Account shall be transferred to the
Purchase Contract Agent for distribution to the Holders in accordance with their
respective interests. If the
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13
Remarketing Agent advises the Collateral Agent in writing that there has been a
Failed Remarketing, thus resulting in an event of default under the Purchase
Contract Agreement and hereunder, the Collateral Agent, for the benefit of the
Company shall, at the written direction of the Company, dispose of the Pledged
Shares in accordance with applicable law and satisfy in full, from such
disposition, such Holders' obligations to pay the Purchase Price for the Common
Stock.
(b) If a Holder of Treasury PIES has not elected to make an effective cash
settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.4(d)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.4(d)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities. Upon maturity of the Pledged Treasury Securities, the Securities
Intermediary, at the written direction of the Collateral Agent, shall invest the
Cash Proceeds of the maturing Pledged Treasury Securities in Permitted
Investments. Without receiving any instruction from any such Holder of Treasury
PIES, the Collateral Agent shall apply the Proceeds of the related Pledged
Treasury Securities to the settlement of such Purchase Contracts on the Purchase
Contract Settlement Date. In the event the sum of the Proceeds from the related
Pledged Treasury Securities and the investment earnings from the investment in
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall instruct
the Securities Intermediary to distribute such excess, when received, to the
Purchase Contract Agent for the benefit of such Holders for distribution to such
Holders in accordance with their respective interests.
Section 6. VOTING RIGHTS' PLEDGED SHARES. The Purchase Contract Agent may
exercise, or refrain from exercising, any and all voting and other consensual
rights pertaining to the Pledged Shares or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; PROVIDED, that the Purchase Contract Agent
shall not exercise or, as the case may be, shall not refrain from exercising
such right if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Shares; and PROVIDED, FURTHER, that the Purchase Contract Agent
shall give the Company and the Collateral Agent at least five days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Shares, including notice of any
meeting at which holders of the Shares are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Shares, the Collateral Agent
shall use reasonable efforts to send promptly to the Purchase Contract Agent
such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Shares (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Shares.
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14
Section 7. RIGHTS AND REMEDIES.
Section 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In addition
to the rights and remedies specified in Section 5.5 hereof or otherwise
available at law or in equity, after an event of default (as specified in
Section 7.1(b) below) hereunder the Collateral Agent shall have all of the
rights and remedies with respect to the Collateral of a secured party under the
Code (whether or not the Code is in effect in the jurisdiction where the rights
and remedies are asserted) and the TRADES Regulations and such additional rights
and remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted.
Without limiting the generality of the foregoing, such remedies may include, to
the extent permitted by applicable law, (i) retention of the Pledged Shares in
full satisfaction of the Holders' obligations under the Purchase Contracts or
(ii) sale of the Pledged Shares in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof, in satisfaction of the
Obligations of the Holder of the Securities of which such Pledged Treasury
Securities is a part under the related Purchase Contracts, the inability to make
such payments shall constitute an event of default hereunder and the Collateral
Agent shall have and may exercise, with reference to such Pledged Treasury
Securities and such Obligations of such Holder, any and all of the rights and
remedies available to a secured party under the Code and the TRADES Regulations
after default by a debtor, and as otherwise granted herein or under any other
law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) dividends on the Pledged
Shares and (ii) the principal amount of the Pledged Treasury Securities,
subject, in each case, to the provisions of Section 3 hereof, and as otherwise
granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the Holder of a Treasury PIES, agrees that, from time
to time, upon the written request of the Collateral Agent, the Purchase Contract
Agent or such Holder shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent acts, its own negligent failure to act or its
own willful misconduct.
Section 7.2 SUBSTITUTIONS. Whenever a Holder has the right to substitute
Treasury Securities, Shares or security entitlements to either of them for
financial assets held in the
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15
Collateral Account, such substitution shall not constitute a novation of the
security interest created hereby.
Section 8. REPRESENTATIONS AND WARRANTIES; COVENANTS.
Section 8.1 REPRESENTATIONS AND WARRANTIES. Each Holder from time to time,
acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent (with respect to his interest in the
Collateral), which representations and warranties shall be deemed repeated on
each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form,
is the sole holder of such Collateral and is the sole
beneficial owner of, or has the right to Transfer, the
Collateral it Transfers to the Securities Intermediary for
credit to the Collateral Account, free and clear of any
security interest, lien, encumbrance, call, liability to
pay money or other restriction other than the security
interest and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the Securities
Intermediary for credit to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have
a valid and perfected first priority security interest
therein (assuming that any central clearing operation or
any securities intermediary or other entity not within the
control of the Holder involved in the Transfer of the
Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the
action required of it hereunder and under applicable law
for perfection of that interest and assuming the
establishment and exercise of control pursuant to Section 4
hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the
creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or violate
any provision of any existing law or regulation applicable
to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is
binding on it or any of its assets.
Section 8.2 COVENANTS. The Purchase Contract Agent and the Holders from
time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the
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16
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any mortgage,
charge, lien, pledge or any other security interest whatsoever
over the Collateral or any part of it other than pursuant to
this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral
or any part of it except for the beneficial interest therein,
subject to the Pledge hereunder, transferred in connection
with the Transfer of the Securities.
Section 9. THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY. It is
hereby agreed as follows:
Section 9.1 APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent shall
act as agent for the Company hereunder with such powers as are specifically
vested in the Collateral Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto. The Collateral Agent:
(a) shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against the Collateral Agent, nor shall the Collateral Agent be
bound by the provisions of any agreement by any party hereto beyond the specific
terms hereof; (b) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or provided for
in, or received by it under, this Agreement, the Securities or the Purchase
Contract Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein or therein or for any failure
by the Company or any other Person (except the Collateral Agent) to perform any
of its obligations hereunder or thereunder or for the perfection, priority or,
except as expressly required hereby, maintenance of any security interest
created hereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except pursuant to directions
furnished under Section 9.2 hereof, subject to Section 9.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own negligence or willful
misconduct; and (e) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder. Subject to the foregoing,
during the term of this Agreement, the Collateral Agent shall take all
reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties
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17
hereunder. In no event shall the Collateral Agent be liable for any amount in
excess of the Value of the Collateral. Notwithstanding the foregoing, each of
the Collateral Agent and the Securities Intermediary in its individual capacity
hereby waives any right of setoff, bankers lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.
Section 9.2 INSTRUCTIONS OF THE COMPANY. The Company shall have the right,
by one or more instruments in writing executed and delivered to the Collateral
Agent, to direct the time, method and place of conducting any proceeding for the
realization of any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, or to direct the taking
or refraining from taking of any action authorized by this Agreement; PROVIDED,
HOWEVER, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent shall be adequately
indemnified as provided herein. Nothing in this Section 9.2 shall impair the
right of the Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not inconsistent with such
direction.
Section 9.3 RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY. Each
of the Securities Intermediary and the Collateral Agent shall be entitled to
rely upon any certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated therein)
and upon advice and statements of legal counsel and other experts selected by
the Collateral Agent and the Securities Intermediary. As to any matters not
expressly provided for by this Agreement, the Collateral Agent and the
Securities Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by the
Company in accordance with this Agreement.
Section 9.4 RIGHTS IN OTHER CAPACITIES. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent, any other Person interested herein
and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, and the Collateral
Agent, the Securities Intermediary and their affiliates may accept fees and
other consideration from the Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; PROVIDED that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral other than the lien created by
the Pledge.
Section 9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES INTERMEDIARY.
Neither the Securities Intermediary nor the Collateral Agent shall be required
to keep itself informed as to
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18
the performance or observance by the Purchase Contract Agent or any Holder of
Securities of this Agreement, the Purchase Contract Agreement, the Securities or
any other document referred to or provided for herein or therein or to inspect
the properties or books of the Purchase Contract Agent or any Holder of
Securities. Neither the Collateral Agent nor the Securities Intermediary shall
have any duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent or the
Securities Intermediary or any of their respective affiliates.
Section 9.6 COMPENSATION AND INDEMNITY. The Company agrees: (i) to pay the
Collateral Agent and the Securities Intermediary from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Securities Intermediary, as the case may be, for all
services rendered by them hereunder and (ii) to indemnify the Collateral Agent
and the Securities Intermediary for, and to hold each of them harmless from and
against, any loss, liability or reasonable out-of-pocket expense incurred
without negligence, willful misconduct or bad faith on its part, arising out of
or in connection with the acceptance or administration of its powers and duties
under this Agreement, including the reasonable out-of-pocket costs and expenses
(including reasonable fees and expenses of counsel) of defending itself against
any claim or liability in connection with the exercise or performance of such
powers and duties.
Section 9.7 FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Securities
Intermediary shall be entitled, after prompt notice to the Company and the
Purchase Contract Agent, at its sole option, to refuse to comply with any and
all claims, demands or instructions with respect to such property or funds so
long as such dispute or conflict shall continue, and the Collateral Agent and
the Securities Intermediary shall not be or become liable in any way to any of
the parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent and the Securities
Intermediary shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing satisfactory to the Collateral Agent or the
Securities Intermediary or (ii) the Collateral Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting. The
Collateral Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.
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Section 9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES INTERMEDIARY.
(a) Subject to the appointment and acceptance of a successor Collateral Agent as
provided below, (i) the Collateral Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as attorney-in-fact for
the Holders of Securities, (ii) the Collateral Agent may be removed at any time
by the Company and (iii) if the Collateral Agent fails to perform any of its
material obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the Purchase
Contract Agent and such failure shall be continuing, the Collateral Agent may be
removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent pursuant to
clause (iii) of the immediately preceding sentence. Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been so appointed and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent's giving of notice of resignation or such removal, then the retiring
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in New York, New York with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or
any of its affiliates. Upon the acceptance of any appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor
Collateral Agent. The retiring Collateral Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent hereunder. After
any retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this Section 9 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent.
(b) Subject to the appointment and acceptance of a successor Securities
Intermediary as provided below, (i) the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Securities, (ii) the Securities
Intermediary may be removed at any time by the Company and (iii) if the
Securities Intermediary fails to perform any of its material obligations
hereunder in any material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Securities Intermediary may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Securities Intermediary pursuant to clause (iii)
of the immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Securities Intermediary. If
no successor Securities Intermediary shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Securities Intermediary may petition any court of competent
jurisdiction for the appointment of a successor Securities Intermediary. The
Securities Intermediary shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least $50,000,000 and shall not
be the Purchase Contract Agent or any of its affiliates. Upon the
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acceptance of any appointment as Securities Intermediary hereunder by a
successor Securities Intermediary, such successor Securities Intermediary shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Securities Intermediary, and the retiring Securities
Intermediary shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor
Securities Intermediary. The retiring Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Securities
Intermediary hereunder. After any retiring Securities Intermediary's resignation
hereunder as Securities Intermediary, the provisions of this Section 9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Securities Intermediary.
Section 9.9 RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 9.10 SURVIVAL. The provisions of this Section 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Securities Intermediary.
Section 9.11 EXCULPATION. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, directors, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent or the Securities Intermediary, or any of them, incurred without any act
or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent or the Securities Intermediary.
Section 10. AMENDMENT.
Section 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent of
any Holders, the Company, the Collateral Agent, the Securities Intermediary and
the Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company;
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company, so long as such
<PAGE>
21
covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder;
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity (or formal defect), to correct or
supplement any provisions herein which may be inconsistent with any other
such provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 10.2 AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent, the Securities Intermediary or the Collateral Agent, as the case
may be, the Company, when duly authorized, the Purchase Contract Agent, the
Securities Intermediary and the Collateral Agent may amend this Agreement for
the purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; PROVIDED, HOWEVER, that no
such supplemental agreement shall, without the unanimous consent of the Holders
of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Corporate PIES to substitute the
Treasury Securities for the Pledged Shares or the rights of Holders of
Treasury PIES to substitute Shares for the Pledged Treasury Securities),
impair the right of the Holder of any Security to receive distributions on
the underlying Collateral or otherwise adversely affect the Holder's
rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
PROVIDED that if any amendment or proposal referred to above would adversely
affect only the Corporate PIES or only the Treasury PIES, then only the affected
class of Holder as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; PROVIDED that the unanimous consent of the
Holders of each outstanding Purchase Contract of such class affected thereby
shall be required to approve any amendment or proposal specified in clauses (1)
- - (3) above.
<PAGE>
22
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 10.3 EXECUTION OF AMENDMENTS. In executing any amendment permitted
by this Section, the Collateral Agent, the Securities Intermediary and the
Purchase Contract Agent shall be entitled to receive and (subject to Section 7.1
of the Purchase Contract Agreement with respect to the Purchase Contract Agent)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent, if any, to the execution and delivery of such
amendment have been satisfied.
Section 10.4 EFFECT OF AMENDMENTS. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 10.5 REFERENCE TO AMENDMENTS. Certificates authenticated, executed
on behalf of the Holders and delivered after the execution of any amendment
pursuant to this Section may, and shall if required by the Collateral Agent or
the Purchase Contract Agent, bear a notation in form approved by the Purchase
Contract Agent and the Collateral Agent as to any matter provided for in such
amendment. If the Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
Section 11. MISCELLANEOUS.
Section 11.1 NO WAIVER. No failure on the part of the Collateral Agent or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Company,
the Securities Intermediary, the Collateral Agent and the Holders from time to
time acting through the Purchase Contract Agent, as their attorney-in-fact, in
connection with the establishment and maintenance of the Collateral Account. The
Company, the Collateral Agent,
<PAGE>
23
the Securities Intermediary and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact, hereby
submit to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent, the Securities Intermediary and the Holders from time to time
of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
Section 11.3 NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 11.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the Securities, by their
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Purchase Contract Agent.
Section 11.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 11.6 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 11.7 EXPENSES, ETC. The Company agrees to reimburse the Collateral
Agent and the Securities Intermediary for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent and the Securities Intermediary), in connection with (i)
the negotiation, preparation, execution and delivery or performance of this
<PAGE>
24
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
and the Securities Intermediary (including, without limitation, reasonable fees
and expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of Securities to
satisfy its obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 11.7; and (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any other
document referred to herein and all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated hereby.
Section 11.8 SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of the Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any consent
to any departure from any requirement of, the Purchase Contract Agreement
or any Purchase Contract or any other agreement or instrument relating
thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[____________________], as Purchase
BANK UNITED CORP., Contract Agent and as
a Delaware corporation attorney-in-fact of the Holders
from time to time of the Securities
By: By:
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
_________________ ___________________
_________________ ___________________
Attention: Attention:
Telecopy: Telecopy:
[_____________________], [_________________________]
as Collateral Agent as Securities Intermediary
By: By:
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
_________________ ___________________
_________________ ___________________
Attention: Attention:
Telecopy: Telecopy:
<PAGE>
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury PIES)
[Securities Intermediary]
Attention:
Telecopy:
Re: ________ PIES of Bank United Corp.
(the "Company")
Please refer to the Pledge Agreement dated as of August [__], 1999 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent,
[_____________________], as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.2 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for an equal Value of Pledged Shares and has delivered to
the undersigned a notice stating that the Holder has Transferred such Treasury
Securities or security entitlements thereto to the Securities Intermediary, for
credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Shares in accordance with Section 5.2 of the Pledge Agreement.
[Purchase Contract Agent]
Date: _______________ By:______________________________
Name:
Title:
<PAGE>
3
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Shares:
__________________ _________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
__________________
Address
__________________
__________________
<PAGE>
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury PIES)
[Securities Intermediary]
Attention:
Telecopy:
Re: ________ PIES of Bank United Corp.
(the "Company")
Securities Account No. [________] entitled
"[_____________________], as Collateral Agent, Securities
Account ([_____________________])" (the "Collateral
Account")
Please refer to the Pledge Agreement, dated as of August [__], 1999 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
[_____________________], as Purchase Contract Agent and as attorney-in-fact for
the holders of PIES from time to time, and the undersigned, as Collateral Agent.
Capitalized terms used herein but not defined shall have the meanings set forth
in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities or
security entitlements thereto has been credited to the Collateral Account by or
for the benefit of _________, as Holder of PIES (the "Holder"), you are hereby
instructed to release from the Collateral Account an equal Value of Shares or
security entitlements thereto by Transfer to the Purchase Contract Agent.
[Collateral Agent]
Dated: ____________________ By: ______________________________
Name:
Title:
<PAGE>
2
Please print name and address of Holder:
_____________________ _______________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________
Address
_____________________
_____________________
<PAGE>
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Corporate PIES)
[Collateral Agent]
Attention:
Telecopy:
Re: ________ PIES of Bank United Corp.
(the "Company")
Please refer to the Pledge Agreement, dated as of August [ ], 1999 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent,
[_____________________], as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PIES from
time to time. Capitalized terms used herein but not defined shall have the
meanings set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "Holder") has elected
to substitute $__________ Value of Shares or security entitlements thereto in
exchange for $__________ Value of Pledged Treasury Securities and has delivered
to the undersigned a notice stating that the Holder has Transferred such Shares
or security entitlements thereto to the Securities Intermediary, for credit to
the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Shares or security entitlements thereto have been
credited to the Collateral Account, to release to the undersigned $__________
Value of Treasury Securities or security entitlements thereto related to _____
Treasury PIES of such Holder in accordance with Section 5.3(a) of the Pledge
Agreement.
[Purchase Contract Agent]
Date: ____________________________ By:_______________________________
Name:
Title:
<PAGE>
2
Please print name and address of Holder electing to substitute Pledged Shares or
security entitlements thereto for Pledged Treasury Securities:
____________________ _______________________________
Name Social Security or other
Taxpayer Identification Number,
if any
____________________
Address
____________________
____________________
<PAGE>
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Corporate PIES)
[Securities Intermediary]
Attention:
Telecopy:
Re: ________ PIES of Bank United Corp.
(the "Company")
Securities Account No. _________ entitled
"[_____________________], as Collateral Agent, Securities
Account ([_____________________])" (the "Collateral
Account")
Please refer to the Pledge Agreement, dated as of August [__], 1999 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
[_____________________], as Purchase Contract Agent and as attorney-in-fact for
the holders of PIES from time to time, and the undersigned, as Collateral Agent.
Capitalized terms used herein but not defined shall have the meanings set forth
in the Pledge Agreement.
When you have confirmed that $_________ Value of Shares or security
entitlements thereto has been credited to the Collateral Account by or for the
benefit of _________, as Holder of PIES (the "Holder"), you are hereby
instructed to release from the Collateral Account $__________ Value of Treasury
Securities or security entitlements thereto by Transfer to the Purchase Contract
Agent.
[Collateral Agent]
Dated: ___________________ BY: _____________________________
Name:
Title:
<PAGE>
Please print name and address of Holder:
_______________________ _______________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_______________________
Address
_______________________
_______________________
<PAGE>
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
[Purchase Contract Agent]
Telecopier No.:
Attention:
Re: ________ PIES of Bank United Corp.
(the "Company")
Please refer to the Pledge Agreement, dated as of August [ ], 1999 (the
"Pledge Agreement"), by and among you, the Company, [_____________________], as
Collateral Agent and the undersigned, as Securities Intermediary. Unless
otherwise defined herein, terms defined in the Pledge Agreement are used herein
as defined therein
In accordance with Section 5.5(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m., [(ON THE FIFTH BUSINESS DAY IMMEDIATELY
PRECEDING THE PURCHASE CONTRACT SETTLEMENT DATE)], we have received (i) $_____
in immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Purchase Contract Settlement Date with respect to
__________ Corporate PIES and (ii) $_________ in immediately available funds
paid in an aggregate amount equal to the Purchase Price to the Company on the
Purchase Contract Settlement Date with respect to ______ Treasury PIES.
[Securities Intermediary]
Date: ___________________ By:________________________________
Name:
Title:
<PAGE>
================================================================================
DRAFT 8/2/99
BANK UNITED CORP.
and
[___________________________], as Collateral Agent
and
[___________________________], as Securities Intermediary
and
[___________________________], as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of August [ ], 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Definitions......................................................1
Section 2. Pledge...........................................................5
2.1 Pledge...............................................................5
2.2 Control; Financing Statement.........................................5
2.3 Termination..........................................................5
Section 3. Distributions on Pledged Collateral..............................5
3.1 Income Distributions.................................................5
3.2 Principal Payments Following Termination Event.......................5
3.3 Principal Payments Prior To or On Purchase Contract Settlement Date..6
3.4 Payments to Purchase Contract Agent..................................6
3.5 Assets Not Properly Released.........................................6
Section 4. Control..........................................................6
4.1 Establishment of Collateral Account..................................6
4.2 Treatment as Financial Assets........................................7
4.3 Sole Control by Collateral Agent.....................................7
4.4 Securities Intermediary's Location...................................7
4.5 No Other Claims......................................................7
4.6 Investment and Release...............................................7
4.7 Statements and Confirmations.........................................8
4.8 Tax Allocations......................................................8
4.9 No Other Agreements..................................................8
4.10 Powers Coupled With An Interest.....................................8
Section 5. Initial Deposit; Establishment of Treasury PIES and
Reestablishment of Corporate PIES..............................8
5.1 Initial Deposit of Shares............................................8
5.2 Establishment of Treasury PIES.......................................8
5.3 Reestablishment of Corporate PIES....................................9
5.4 Termination Event...................................................10
5.5 Cash Settlement.....................................................11
5.6 Early Settlement....................................................12
5.7 Application of Proceeds Settlement..................................12
Section 6. Voting Rights' Pledged Shares...................................13
i
<PAGE>
Section 7. Rights and Remedies.............................................14
7.1 Rights and Remedies of the Collateral Agent.........................14
7.2 Substitutions.......................................................15
Section 8. Representations and Warranties; Covenants.......................15
8.1 Representations and Warranties......................................15
8.2 Covenants...........................................................16
Section 9. The Collateral Agent and the Securities Intermediary............16
9.1 Appointment, Powers and Immunities..................................16
9.2 Instructions of the Company.........................................17
9.3 Reliance by Collateral Agent and Securities Intermediary............17
9.4 Rights in Other Capacities..........................................17
9.5 Non-Reliance on Collateral Agent and Securities Intermediary........18
9.6 Compensation and Indemnity..........................................18
9.7 Failure to Act......................................................18
9.8 Resignation of Collateral Agent and Securities Intermediary.........19
9.9 Right to Appoint Agent or Advisor...................................20
9.10 Survival...........................................................20
9.11 Exculpation........................................................20
Section 10. Amendment......................................................20
10.1 Amendment Without Consent of Holders...............................20
10.2 Amendment with Consent of Holders..................................21
10.3 Execution of Amendments............................................22
10.4 Effect of Amendments...............................................22
10.5 Reference to Amendments............................................22
Section 11. Miscellaneous..................................................22
11.1 No Waiver..........................................................22
11.2 Governing Law......................................................22
11.3 Notices............................................................23
11.4 Successors and Assigns.............................................23
11.5 Counterparts.......................................................23
11.6 Severability.......................................................23
11.7 Expenses, etc......................................................23
11.8 Security Interest Absolute.........................................24
ii
<PAGE>
PAGE
------
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Treasury PIES)
EXHIBIT B Instruction from Collateral Agent to Securities Intermediary
(Establishment of Treasury PIES)
EXHIBIT C Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Corporate PIES)
EXHIBIT D Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Corporate PIES)
EXHIBIT E Notice of Cash Settlement from the Securities Intermediary to the
Purchase Contract Agent.
iii
EXHIBIT 4.16
FORM OF REMARKETING AGREEMENT
BANK UNITED CORP.
SERIES B PREFERRED STOCK
REMARKETING AGREEMENT
August [ ], 1999
LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Bank United Corp., a Delaware corporation (the "Company"), is
issuing today 2,000,000 shares of its Series B Preferred Stock, liquidation
preference of $50 per share (the "Preferred Stock"), pursuant to a Certificate
of Designations filed with the Secretary of State of the State of Delaware (the
"Certificate of Designations"). Capitalized terms used but not defined in this
Remarketing Agreement (this "Agreement") shall have the meanings set forth in
the Certificate of Designations.
The Remarketing (as defined below) of the Preferred Stock is
provided for in the Certificate of Designations. As used in this Agreement, the
term "Remarketed Preferred Stock" means the Preferred Stock subject to the
Remarketing on the fifth Business Day prior to the Purchase Contract Settlement
Date; the term "Remarketing Procedures" means the procedures in connection with
the Remarketing of the Preferred Stock described in the Certificate of
Designations; and the term "Remarketing" means the remarketing of the Remarketed
Preferred Stock pursuant to the Remarketing Procedures.
Section 1. APPOINTMENT AND OBLIGATIONS OF THE REMARKETING Agent. (a)
The Company hereby appoints Lehman Brothers as exclusive remarketing agent (the
"Remarketing Agent") for the purpose of (i) Remarketing the Remarketed Preferred
Stock on behalf of the holders thereof and (ii) performing such other duties as
are assigned to the Remarketing Agent in the Remarketing Procedures, all in
accordance with and pursuant to the Remarketing Procedures.
(b) The Remarketing Agent agrees (i) to use commercially reasonable
efforts to remarket the Remarketed Preferred Stock tendered or deemed tendered
to the Remarketing Agent in the Remarketing, (ii) to notify the Company promptly
of the Reset Rate and (iii) to carry out such other duties as are assigned to
the Remarketing Agent in the Remarketing Procedures, all in accordance with the
provisions of the Remarketing Procedures.
(c) On the third Business Day immediately preceding the Purchase
Contract Settlement Date (the "Remarketing Date"), the Remarketing Agent shall
use commercially
<PAGE>
reasonable efforts to remarket, at a price equal to 100.50% of the aggregate
liquidation preference thereof, the Remarketed Preferred Stock tendered or
deemed tendered for purchase.
(d) If, as a result of the efforts described in Section 1(b), the
Remarketing Agent determines that it will be able to remarket all Remarketed
Securities tendered or deemed tendered for purchase at a price of 100.50% of the
aggregate liquidation preference of such Remarketed Preferred Stock prior to
4:00 p.m., New York City time, on the Remarketing Date, the Remarketing Agent
shall determine the Reset Rate, which shall be the rate per annum (rounded to
the nearest one-thousandth (0.001) of one percent per annum) that the
Remarketing Agent determines, in its sole judgment, to be the lowest rate per
annum that will enable it to remarket all Remarketed Preferred Stock tendered or
deemed tendered for Remarketing.
(e) If none of the holders of Remarketed Preferred Stock elects to
have Remarketed Preferred Stock Remarketed in the Remarketing, the Remarketing
Agent shall, in its sole discretion, determine the rate that would have been
established had a Remarketing of all the Preferred Stock been held on the
Remarketing Date, and such rate shall be the Reset Rate.
(f) If, by 4:00 p.m., New York City time, on the Remarketing Date,
the Remarketing Agent is unable to remarket all Remarketed Preferred Stock
tendered or deemed tendered for purchase, a failed Remarketing (the "Failed
Remarketing") shall be deemed to have occurred, and the Remarketing Agent shall
so advise by telephone the Depositary and the Company. If a Failed Remarketing
occurs, the Reset Rate will be equal to (i) the "AA" Composite Commercial Paper
Rate on the Remarketing Date, plus (ii) a spread as set forth in the Certificate
of Designations.
(g) By approximately 4:30 p.m., New York City time, on the
Remarketing Date, PROVIDED that there has not been a Failed Remarketing, the
Remarketing Agent shall advise, by telephone (i) the Depositary and the Company
of the Reset Rate determined in the Remarketing and the number of shares of
Remarketed Preferred Stock sold in the Remarketing, (ii) each purchaser (or the
Depositary Participant thereof) of the Reset Rate and the number of shares of
Remarketed Preferred Stock such purchaser is to purchase and (iii) each
purchaser to give instructions to its Depositary Participant to pay the purchase
price on the Purchase Contract Settlement Date in same day funds against
delivery of the shares of Remarketed Preferred Stock purchased through the
facilities of the Depositary.
(h) The Remarketing Agent shall remit (i) to the Collateral Agent
proceeds of the Remarketed Preferred Stock subject to the Pledge Agreement in an
amount equal to 100% of the aggregate liquidation preference of such Remarketed
Preferred Stock and (ii) to the Depositary Participant of the seller of
Remarketed Preferred Stock not subject to the Pledge Agreement proceeds of such
Remarketed Preferred Stock in an amount equal to 100% of the aggregate
liquidation preference of such Remarketed Preferred Stock.
2 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company hereby represents and warrants to the Remarketing Agent (i) on
<PAGE>
and as of the date hereof, (ii) on and as of the date the Prospectus or other
Remarketing Materials (each, as defined in Section 2(a) below) which are first
distributed in connection with the Remarketing (the "Commencement Date"), (iii)
on and as of the Remarketing Date and (iv) on and as of the Purchase Contract
Settlement Date that:
(a) Registration statements on Form S-3 (File Nos. 333-75937 and
333-83797) and an amendment or amendments thereto with respect to the
initial offering of the Preferred Stock have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act; and a
registration statement or registration statements on Form S-3, if required
to be filed in connection with the Remarketing, may also be prepared by
the Company in conformity with the requirements of the Securities Act and
the Rules and Regulations and filed with the Commission under the
Securities Act. Copies of such registration statements that have become
effective and the amendment or amendments to such registration statements
have been delivered by the Company to you. As used in this Agreement,
"Effective Time" means the date and time as of which the last of such
registration statements that have become effective or may be filed, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time of such last registration statement; "Preliminary
Prospectus" means each prospectus included in such last registration
statement, or amendment thereto, before it became effective under the
Securities Act and any prospectus filed by the Company with your consent
pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such last registration statement, as amended at its
Effective Time, including documents incorporated by reference therein at
such time and, if applicable, all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations, including any information deemed to be part of such
Registration Statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "Prospectus" means such
final prospectus, as first filed pursuant to Rule 424(b) of the Rules and
Regulations. Reference made herein to any Preliminary Prospectus, the
Prospectus or any other information furnished by the Company to the
Remarketing Agent for distribution to investors in connection with the
Remarketing (the "Remarketing Materials") shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, or, in the case of
Remarketing Materials, referred to as incorporated by reference therein,
and any reference to any amendment or supplement to any Preliminary
Prospectus, the Prospectus or the Remarketing Materials shall be deemed to
refer to and include any document filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the date of such
Preliminary Prospectus or the Prospectus incorporated by reference therein
pursuant to Item 12 of Form S-3 or, if so incorporated, the Remarketing
Materials, as the case may be; and any reference to any amendment to
<PAGE>
the Registration Statement shall be deemed to include any annual report of
the Company filed with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement.
(b) The Registration Statement conforms (and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform) in all respects to the requirements of
the Securities Act and the Rules and Regulations, and the Registration
Statement, the Prospectus and the Remarketing Materials do not and will
not, as of the Effective Date (as to the Registration Statement and any
amendment thereto), as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) and as of the Commencement Date,
Remarketing Date and Purchase Contract Settlement Date (as to any
Remarketing Materials) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; PROVIDED that no
representation and warranty is made as to information contained in or
omitted from the Registration Statement, the Prospectus or the Remarketing
Materials in reliance upon and in conformity with written information
furnished to the Company by the Remarketing Agent specifically for
inclusion therein; and the Commission has not issued an order preventing
or suspending the use of the Registration Statement, any Preliminary
Prospectus, the Prospectus or the Remarketing Materials.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with Commission, as the case may be, will conform
in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus or
in any Remarketing Materials, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction;
<PAGE>
and each subsidiary (as defined in Section 14 hereof) of the Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
(e) Bank United (the "Bank") has been duly organized and is validly
existing as a federally chartered savings bank in good standing under the
laws of the United States, and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Final Prospectus. Each subsidiary of the Bank has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation and has the power and
authority to own, lease and operate its properties and to conduct its
business as described in the Final Prospectus.
(f) The Company has an authorized capitalization as set forth in the
Prospectus and in any Remarketing Materials; all of the issued shares of
capital stock of the Company and each wholly-owned subsidiary of the
Company (including, without limitation, the Bank) have been duly and
validly authorized and issued and are fully paid and non-assessable; and
all of the issued shares of capital stock of each subsidiary of the
Company, including without limitation the Bank, [other than [ ], ] except
as set forth in the Prospectus, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(g) The Bank constitutes the only "significant subsidiary" (as such
term is defined in Rule 1-02 of Regulation S-X) of the Company (each, a
"Significant Subsidiary").
(h) The Corporate PIES have been duly authorized by the Company, and
when duly executed by the Company (assuming due execution by the Purchase
Contract Agent as attorney-in-fact for the holders thereof and due
authentication by the Purchase Contract Agent) and delivered by the
Company and, upon payment therefor as set forth herein, will be duly and
validly issued and outstanding, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Purchase
Contract Agreement and enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles, regardless of whether enforcement is considered in a
proceeding in equity or at law (the "Bankruptcy Exceptions"), and an
implied covenant of good faith and fair dealing.
(i) The shares of Preferred Stock and Remarketed Preferred Stock
have been duly authorized by the Company and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable.
<PAGE>
(j) This Agreement has been duly authorized, executed and delivered
by the Company.
(k) The Purchase Contract Agreement has been duly authorized by the
Company and, when duly executed by the proper officers of the Company
(assuming due execution and delivery by the Purchase Contract Agent) and
delivered by the Company, will constitute a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by the Bankruptcy
Exceptions and an implied covenant of good faith and fair dealing.
(l) The Pledge Agreement has been duly authorized by the Company
and, when duly executed by the proper officers of the Company (assuming
due execution and delivery by the Purchase Contract Agent, the Securities
Intermediary and the Collateral Agent) and delivered by the Company, will
constitute a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions and an
implied covenant of good faith and fair dealing.
(m) The Remarketed Preferred Stock, the Certificate of Designations
and the Remarketing Agreement, when the Remarketed Preferred Stock is
delivered pursuant to this Agreement, will conform to the descriptions
thereof contained in the Prospectus and in any Remarketing Materials.
(n) The execution, delivery and performance of this Agreement and
the Certificate of Designations by the Company, the consummation by the
Company of the transactions contemplated hereby and thereby and the
issuance and delivery of the Preferred Stock and the Remarketed Preferred
Stock (collectively, the "Transactions") did not and will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of the
Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets; and except for such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Securities Act, the Exchange Act and applicable state securities laws
in connection with the initial distribution of the Preferred Stock and the
Remarketed Preferred Stock or the Remarketing, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the Transactions.
<PAGE>
(o) There are no contracts, agreements or understandings between (i)
the Company and (ii) any person granting such person the right to require
the Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act [, in each case other than [
]].
(p Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus or in any Remarketing
Materials, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, which could, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or upon
the ability of the Company to perform their obligations under this
Agreement (each, a "Material Adverse Effect"), otherwise than as set forth
or contemplated in the Prospectus and in any Remarketing Materials; and,
since such date, there has not been any material change in the
consolidated share capital or long-term debt of the Company and its
subsidiaries or the consolidated share capital or long-term debt of any
Significant Subsidiary or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus and in any Remarketing
Materials.
(q The financial statements filed as part of the Registration
Statement or incorporated by reference in the Prospectus or as presented
in any Remarketing Materials present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved; and the supporting
schedules included or incorporated by reference in the Prospectus or in
any Remarketing Materials present fairly the information required to be
stated therein.
(r Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus or is
incorporated by reference therein or in any Remarketing Materials and who
have delivered the letter referred to in Section 5(g) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(s The Company and each Significant Subsidiary has good and
marketable title in fee simple to such of its fixed assets as are real
property and good and marketable title to its other assets reflected in
the most recent consolidated balance sheet incorporated by
<PAGE>
reference in the Prospectus or in any Remarketing Materials, except
properties and assets that are leased or that are sold or otherwise
disposed of in the ordinary course of business after the date of said
balance sheet, subject to no mortgages, liens, charges or encumbrances of
any kind whatsoever (collectively, the "Liens") [other than [ ]].
(t Other than as set forth or incorporated by reference in the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or to which any
property or asset of the Company or any of its subsidiaries is the subject
which could reasonably be expected individually or in the aggregate to
have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others. No cease and desist
order has been entered by the Office of Thrift Supervision (the "OTS") or
the FDIC against the Company, the Bank or any of their respective
subsidiaries.
(u The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(v There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted
by the Rules and Regulations.
(w No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, including, without limitation, the OTS and the FDIC,
is necessary or required for the due authorization, execution and delivery
by the Company of this Agreement or for the performance by the Company of
the Transactions, except such as have been already obtained or will have
been obtained or made prior to the Closing Date (as defined in the
Underwriting Agreement, dated August [ ], 1999, between the Company and
Lehman Brothers) or as may be required under the Securities Act or the
Rules and Regulations or state securities laws.
(x None of the Company nor any Significant Subsidiary has any
material contingent liability which is not disclosed in the Prospectus.
(y None of the Company nor any Significant Subsidiary (i) is in
violation of its charter or by-laws or similar constitutive documents,
(ii) is in default in any respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject, except where
such defaults, individually or in the
<PAGE>
aggregate, could not reasonably be expected to have a Material Adverse
Effect or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its properties or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its properties or
assets or to the conduct of its business, except where such violations or
failures, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(z Neither the Company nor any subsidiary of the Company is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations of the Commission thereunder.
(aa Each of the Company and each Significant Subsidiary has
statutory authority, franchises and consents free from burdensome
restrictions and adequate for the conduct of the business in which it is
engaged.
(bb In the event the Company shall become either directly or
indirectly a bank holding company for purposes of the Bank Holding Company
Act of 1956, as amended (the "BHC Act"), and the rules and regulations of
the Board of Governors of the Federal Reserve System thereunder (the "BHC
Rules"), the current activities of the Company and its subsidiaries (as
defined in the BHC Rules) would be activities permissible for a bank
holding company under the BHC Act and the BHC Rules.
(cc The Prospectus accurately describes the most restrictive of the
existing limitations on the payment of dividends by Bank United on its
shares of common stock held by the Company.
3. FEES AND EXPENSES. (a) For the performance of its services as
Remarketing Agent hereunder, the Remarketing Agent shall retain on the Purchase
Contract Settlement Date 0.50% of the amount of the proceeds received in the
Remarketing.
(b The Company agrees to pay (i) the costs incident to the
preparation and printing of the Registration Statement, Prospectus and any
Remarketing Materials and any amendments or supplements thereto; (ii) the costs
of distributing the Registration Statement, Prospectus and any Remarketing
Materials and any amendments or supplements thereto; (iii) the fees and expenses
of qualifying the Remarketed Securities under the securities laws of the several
jurisdictions as provided in Section 4(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Remarketing Agent); (iv) all other costs and expenses incident to
the performance of the obligations of the Company hereunder; and (v) the
reasonable fees and expenses of counsel to the Remarketing Agent in connection
with their duties hereunder.
<PAGE>
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees to use its
reasonable best efforts:
(a To prepare any registration statement or prospectus, if required,
in connection with the Remarketing, in a form approved by the Remarketing
Agent and to file any such prospectus pursuant to the Securities Act
within the period required by the Rules and Regulations; to advise the
Remarketing Agent, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Remarketing Agent with copies thereof;
to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Remarketed Securities; to advise the Remarketing Agent, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of the Prospectus,
of the suspension of the qualification of any shares of the Remarketed
Preferred Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal.
(b To furnish promptly to the Remarketing Agent and to counsel for
the Remarketing Agent a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith.
(c To deliver promptly to the Remarketing Agent in New York City
such number of the following documents as the Remarketing Agent shall
request: (i) conformed copies of the Registration Statement as originally
filed with the Commission and each amendment thereto, (ii) the Prospectus
and any amended or supplemented Prospectus, (iii any document incorporated
by reference in the Prospectus (excluding exhibits thereto) and (iv) any
Remarketing Materials; and, if the delivery of a prospectus is required at
any time in connection with the Remarketing and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act, to notify the Remarketing Agent and, upon its request,
to file such document and to prepare and furnish without
<PAGE>
charge to the Remarketing Agent and to any dealer in securities as many
copies as the Remarketing Agent may from time to time request of an
amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Remarketing
Agent, be required by the Securities Act or requested by the Commission.
(e Prior to filing with the Commission (i) any amendment to the
Registration Statement or supplement to the Prospectus or any document
incorporated by reference in the Prospectus or (ii) any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Remarketing Agent and counsel for the Remarketing Agent;
and not to file any such amendment or supplement which shall be
disapproved by the Remarketing Agent promptly after reasonable notice.
(f As soon as practicable after the Effective Date of the
Registration Statement to make generally available to the Company's
security holders and to deliver to the Remarketing Agent an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
(g During a period of five years following the Effective Date of the
Registration Statement, to deliver to the Remarketing Agent copies of all
reports or other communications (financial or other) furnished to
shareholders of the Company, and deliver to the Remarketing Agent, (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed by the Company with the Commission or any national
securities exchange on which any of the Remarketed Securities or any class
of securities of the Company may be listed; and (ii) such additional
information concerning the business and financial condition of the Company
as the Remarketing Agent may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports
furnished to the Company's shareholders generally or to the Commission).
(h Promptly from time to time to take such action as the Remarketing
Agent may reasonably request to qualify any shares of the Remarketed
Preferred Stock for offering and sale under the securities laws of such
jurisdictions as the Remarketing Agent may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Securities; PROVIDED that in connection therewith, the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
<PAGE>
5. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS. The
obligations of the Remarketing Agent hereunder are subject to the accuracy, on
and as of the date when made, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder and to each of the following additional terms and conditions:
(a The Prospectus shall have been timely filed with the Commission;
no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with.
(b The Remarketing Agent shall not have discovered and disclosed to
the Company on or prior to the Remarketing Date that the Prospectus, the
Registration Statement or the Remarketing Materials or any amendment or
supplement thereto contains any untrue statement of a fact which, in the
opinion of counsel for the Remarketing Agent, is material or omits to
state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Preferred Stock,
the PIES, the Remarketed Preferred Stock, the Prospectus, each
Registration Statement, the Remarketing Materials and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Remarketing Agent, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d Counsel to the Company shall have furnished to the Remarketing
Agent its written opinion, as counsel to the Company, addressed to the
Remarketing Agent and dated the Remarketing Date, in form and substance
satisfactory to the Remarketing Agent, to the effect that:
(i The Company and each Significant Subsidiary have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, with respective power and authority (corporate and
other) to own their respective properties and conduct their
businesses as described in the Prospectus.
(ii The Company has an authorized capitalization as set forth
in the Prospectus and in any Remarketing Materials, all of the
issued capital shares of the Company and each Significant Subsidiary
of the Company have been duly and
<PAGE>
validly authorized and issued and are fully paid and non-assessable;
and all of the issued shares of capital stock of each Significant
Subsidiary (except as set forth or incorporated by reference in the
Registration Statement) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(iii The Company and each Significant Subsidiary has been duly
qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as
to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified
in any such jurisdiction.
(iv There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of
the Preferred Stock or the Remarketed Preferred Stock pursuant to
the Company's charter or by-laws or any agreement or other
instrument known to such counsel.
(v To the best of such counsel's knowledge and other than as
set forth in the Prospectus or in any Remarketing Materials, there
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or to which any
property or asset of the Company or any of its subsidiaries is
subject which could reasonably be expected individually or in the
aggregate to have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries; and, to the best of such counsel's
knowledge and other than as set forth in the Prospectus, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(vi The Registration Statement was declared effective under
the Securities Act, as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations
specified in such opinion on the date specified therein and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii The Registration Statement, as of its Effective Date, and
the Prospectus, as of its date, and any further amendments or
supplements thereto, as of their respective dates, made by the
Company prior to the Purchase Contract Settlement Date (other than
the financial statements, related schedules and other financial data
contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements
of the Securities Act and the Rules and Regulations; and the
documents incorporated by
<PAGE>
reference in the Prospectus and any further amendment or supplement
to any such incorporated document made by the Company prior to the
Purchase Contract Settlement Date (other than the financial
statements, related schedules and other financial data contained
therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(viii The statements contained in the Prospectus under the
captions "Description of the PIES", "Description of the Purchase
Contracts", "Certain Provisions of the Purchase Contracts, the
Purchase Contract Agreement and the Pledge Agreement" and
"Description of the Preferred Stock" insofar as they purport to
constitute summaries of certain terms of documents referred to
therein, constitute accurate summaries of the terms of such
documents in all material respects.
(ix The shares of Preferred Stock and Remarketed Preferred
Stock have been duly authorized, by the Company and, when issued and
delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and non-assessable.
(x This Agreement has been duly authorized, executed and
delivered by the Company.
(xi The Purchase Contract Agreement has been duly authorized
by the Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent) and delivered by the Company, will constitute a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as the enforcement
thereof may be limited by the Bankruptcy Exceptions and an implied
covenant of good faith and fair dealing.
(xii The Pledge Agreement has been duly authorized by the
Company and, when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Purchase
Contract Agent, the Securities Intermediary and the Collateral
Agent) and delivered by the Company, will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by the Bankruptcy Exceptions and an implied covenant of good
faith and fair dealing.
(xiii The Transactions will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any
<PAGE>
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company
or any of the Significant Subsidiaries is a party or by which the
Company or any of the Significant Subsidiaries is bound or to which
any of the properties or assets of the Company or any of the
Significant Subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Company or any of the Significant Subsidiaries or any statute, rule
or regulation or any order known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of the Significant Subsidiaries or any of their properties or
assets; and, except for the registration of the Preferred Stock and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the
Transactions.
(xiv Neither the Company nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the 1940 Act.
(xv Based upon current law and the assumptions stated or
referred to therein, the statements set forth in the Prospectus or
in the Remarketing Materials under the caption "United States
Federal Income Tax Consequences" insofar as they purport to
constitute summaries of matters of United States federal tax laws
and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in
all material respects.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of
America and the laws of the State of Delaware. Such counsel shall also
advise the Remarketing Agent that although such counsel is not passing
upon and assumes no responsibility or liability for the accuracy,
completeness or fairness of the statements contained in the documents
incorporated by reference in the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Remarketing Date,
they have no reason to believe that any of such documents (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion), when such documents became effective or
were filed with the Commission, as the case may be, contained, in the case
of a registration statement which became effective under the Securities
Act, an untrue statement of a material fact or omitted to state a material
fact required to be stated therein necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Securities Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such documents were so
filed, not misleading. Such counsel shall also advise the Remarketing
Agent that although such counsel is not passing upon and, except as set
<PAGE>
forth in clauses (viii) and (xv) above, assumes no responsibility or
liability for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus and the
Remarketing Materials and any further amendments and supplements thereto
made by the Company prior to such date, they have no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such date (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus and the Remarketing Materials or any
further amendment or supplement thereto made by the Company prior to such
Remarketing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or that, as of
such Remarketing Date, either the Registration Statement, the Prospectus
or the Remarketing Materials or any further amendment or supplement
thereto made by the Company prior to such Remarketing Date (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into
the Prospectus or the Remarketing Materials or required to be described in
the Registration Statement, the Prospectus or the Remarketing Materials
which were not filed or incorporated by reference or described as
required.
(e Counsel to the Purchase Contract Agent shall have furnished to
the Remarketing Agent its written opinion, as counsel to the Purchase
Contract Agent, addressed to the Remarketing Agent and dated the
Remarketing Date, in form and substance satisfactory to the Remarketing
Agent, to the effect that:
(i The Purchase Contract Agent is duly incorporated and is
validly existing as a banking corporation in good standing under the
laws of the jurisdiction of its incorporation with all necessary
power and authority to execute, deliver and perform its obligations
under the Purchase Contract Agreement and the Pledge Agreement.
(ii The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement [in its capacity as Purchase Contract Agent or Securities
Intermediary, as applicable,] and the authentication and delivery of
the PIES have been duly authorized by all necessary corporate action
on the part of the Purchase Contract
<PAGE>
Agent. The Purchase Contract Agreement and the Pledge Agreement have
been duly executed and delivered by the Purchase Contract Agent [in
its capacity as Purchase Contract Agent or Securities Intermediary,
as applicable,] and constitute the valid and binding agreements of
the Purchase Contract Agent [in its capacity as Purchase Contract
Agent or Securities Intermediary, as applicable,] enforceable
against the Purchase Contract Agent in accordance with their terms,
except as the enforcement thereof may be limited by the Bankruptcy
Exceptions and an implied covenant of good faith and fair dealing.
(iii The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent [in its capacity as Purchase Contract Agent or Securities
Intermediary, as applicable,] does not conflict with or constitute a
breach of the charter or by-laws of the Purchase Contract Agent.
(iv No consent, approval or authorization of, or registration
with or notice to, any state or federal governmental authority or
agency is required for the execution, delivery or performance by the
Purchase Contract Agent of the Purchase Contract Agreement and the
Pledge Agreement [in its capacity as Purchase Contract Agent or
Securities Intermediary, as applicable].
(f Counsel to the Collateral Agent shall have furnished to the
Remarketing Agent its written opinion, as counsel to the Collateral Agent,
and addressed to the Remarketing Agent and dated the Remarketing Date, in
form and substance satisfactory to the Remarketing Agent, to the effect
that:
(i The Collateral Agent is duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
the jurisdiction of incorporation with all necessary power and
authority to execute, deliver and perform its obligations under the
Pledge Agreement.
(ii The execution, delivery and performance by the Collateral
Agent of the Pledge Agreement have been duly authorized by all
necessary corporate action on the part of the Collateral Agent. The
Pledge Agreement has been duly executed and delivered by the
Collateral Agent and constitutes the valid and binding agreement of
the Collateral Agent, enforceable against the Collateral Agent in
accordance with its terms, except as the enforcement thereof may be
limited by the Bankruptcy Exception and an implied covenant of good
faith and fair dealing.
(iii The execution, delivery and performance of the Pledge
Agreement by the Collateral Agent does not conflict with or
constitute a breach of the charter or by-laws of the Collateral
Agent.
<PAGE>
(iv No consent, approval or authorization of, or registration
with or notice to, any state or Federal governmental authority or
agency is required for the execution, delivery or performance by the
Collateral Agent of the Pledge Agreement.
(g On the Remarketing Date, the Company shall have furnished to the
Remarketing Agent a letter addressed to the Remarketing Agent and dated
such date, in form and substance satisfactory to the Remarketing Agent, of
Deloitte & Touche LLP, or such other firm of nationally recognized
independent public accountants satisfactory to the Remarketing Agent,
containing statements and information of the type ordinarily included in
accountants" "comfort letters" with respect to certain financial
information contained in the Prospectus and in the Remarketing Materials.
(h The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of (A) the Company's Chairman of
the Board and President, or its Executive Vice President and (B) its chief
financial officer, stating that:
(i The representations, warranties and agreements of the
Company in Section 2 are true and correct as of the Remarketing
Date; the Company has complied with all its agreements contained
herein; and the conditions contained in Section 5(a) have been
fulfilled;
(ii (A) Neither the Company, the Bank nor any of the Company's
other subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by reference
in the Prospectus or in the Remarketing Materials any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which
could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, otherwise than as set forth or
contemplated in the Prospectus or in the Remarketing Materials and
(B) since the respective dates as of which information is given in
the Prospectus or in the Remarketing Materials, there has not been
any material change in the consolidated share capital or long-term
debt of the Company and its subsidiaries (including, without
limitation, the Bank) or the consolidated share capital or long-term
debt of any Significant Subsidiary (including, without limitation,
the Bank) or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, including without limitation the Bank
(taken as a whole), otherwise than as set forth or contemplated in
the Prospectus or the Remarketing Materials; and
(iii They have carefully examined the Registration Statement,
the Prospectus and the Remarketing Materials and, in their opinion
(A) the
<PAGE>
Registration Statement, as of its Effective Date, and the Prospectus
and the Remarketing Materials, as of their respective dates, did not
include any untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (B) since such
dates, no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the
Prospectus or the Remarketing Materials.
(i (i) Neither the Company nor any of its subsidiaries (including,
without limitation, the Bank) shall have sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus and in the Remarketing Materials any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or in the Remarketing Materials or
(ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus or in the Remarketing
Materials, the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Remarketing Agent, so material and
adverse as to make it impracticable or inadvisable to proceed with the
Remarketing on the terms and in the manner contemplated in the Prospectus
and in the Remarketing Materials.
(j Without the prior written consent of the Remarketing Agent, the
Certificate of Designations shall not have been amended in any manner, or
otherwise contain any provision contained therein as of the date hereof
that, in the opinion of the Remarketing Agent, materially changes the
nature of the Remarketed Preferred Stock or the Remarketing Procedures.
(k Subsequent to the execution and delivery of this Agreement, (i)
no downgrading shall have occurred in the rating accorded the Preferred
Stock or any of the Company's, any Significant Subsidiary's (including,
without limitation, the Bank) debt securities by any "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Securities Act and
(ii no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Preferred Stock or any of the Company's, any Significant
Subsidiary's (including, without limitation, the Bank) debt securities.
(l Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or
<PAGE>
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Remarketing Agent,
impracticable or inadvisable to proceed with the Remarketing on the terms
and in the manner contemplated in the Prospectus or in the Remarketing
Materials.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Remarketing Agent.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify
and hold harmless the Remarketing Agent, its officers and employees and each
person, if any, who controls the Remarketing Agent within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of the
Remarketed Preferred Stock), to which the Remarketing Agent or that officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Remarketing Materials or in any amendment or
supplement thereto, or (B) in any blue sky application or other document
prepared or executed by the Company (or based upon any written information
furnished by the Company) specifically for the purpose of qualifying any or all
of the Remarketed Preferred Stock under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement, the
Prospectus or the Remarketing Materials or in any amendment or supplement
thereto, or in any Blue Sky Application, any material fact required to be stated
therein or necessary to make the statements therein not misleading and shall
reimburse the Remarketing Agent and each such officer, employee and controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Remarketing Agent or that officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus or the
<PAGE>
Remarketing Materials or in any such amendment or supplement, or in any Blue Sky
Application in reliance upon and in conformity with the written information
furnished to the Company by or on behalf of the Remarketing Agent specifically
for inclusion therein and described in a letter from the Remarketing Agent to
the Company and PROVIDED FURTHER, that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of the Remarketing Agent, its
officers or employees or any person controlling the Remarketing Agent on account
of any loss, claim, damage, liability or action arising from the sale of the
Remarketed Preferred Stock to any person by the Remarketing Agent if the
Remarketing Agent failed to send or give a copy of the Prospectus, as the same
may be amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure
resulted from non-compliance by the Company with Section 4(c). For purposes of
the last proviso to the immediately preceding sentence, the term "Prospectus"
shall not be deemed to include the documents incorporated therein by reference,
and the Remarketing Agent shall not be obligated to send or give any supplement
or amendment to any document incorporated by reference in any Preliminary
Prospectus or the Prospectus to any person other than a person to whom the
Remarketing Agent had delivered such incorporated document or documents in
response to a written request therefor. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to the
Remarketing Agent or to any officer, employee or controlling person of the
Remarketing Agent.
(b The Remarketing Agent shall indemnify and hold harmless the
Company, its officers and employees, its directors and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company, any such director, officer or employee or any
such controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Remarketing Materials or in any amendment or
supplement thereto or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Remarketing Materials or in any amendment or
supplement thereto, or in any Blue Sky Application, any material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company by or on behalf
of the Remarketing Agent specifically for inclusion therein and described in a
letter from the Remarketing Agent to the Company and shall reimburse the Company
and any such director, officer or employee or such controlling person for any
legal or other expenses reasonably incurred by the Company or any such director
or officer or any such controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is
<PAGE>
in addition to any liability which the Remarketing Agent may otherwise have to
the Company or any such director or officer or any such controlling person.
(c Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Remarketing Agent shall have the right to employ counsel to represent
jointly the Remarketing Agent and its officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Remarketing Agent against the Company under
this Section 6 if, in the reasonable judgment of the Remarketing Agent, it is
advisable for the Remarketing Agent and those officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d If the indemnification provided for in this Section 6 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the
<PAGE>
relative benefits received by the Company on the one hand and the Remarketing
Agent on the other hand from the Remarketing or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Remarketing Agent on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Remarketing Agent on the other
with respect to such offering shall be deemed to be in the same proportion as
the total liquidation or principal amount of the Remarketed Securities less the
fee paid to the Remarketing Agent pursuant to Section 3(a) of this Agreement, on
the one hand, and the total fees received by the Remarketing Agent pursuant to
such Section 3(a), on the other hand, bear to the total liquidation preference
of the Remarketed Preferred Stock. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Remarketing Agent on the other
hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Remarketing Agent agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purposes of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), the Remarketing Agent shall not be required to
contribute any amount in excess of the amount by which the fees received by it
under Section 3 exceed the amount of any damages which the Remarketing Agent has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. RESIGNATION AND REMOVAL OF THE REMARKETING AGENT. The Remarketing
Agent may resign and be discharged from its duties and obligations hereunder,
and the Company may remove the Remarketing Agent, by giving 60 days' prior
written notice, in the case of a resignation, to the Company and the Depositary
and, in the case of a removal, the removed Remarketing Agent and the Depositary;
PROVIDED, HOWEVER, that (i) the Company may not remove the Remarketing Agent
unless (A) the Remarketing Agent becomes involved as a debtor in a bankruptcy,
insolvency or similar proceeding, (B) the Remarketing Agent shall not be among
the 15 underwriters with the largest volume underwritten in dollars, on a lead
or co-managed basis, of U.S. domestic debt securities during the twelve-month
period ended as of the last calendar quarter preceding the Remarketing Date or
(C) the Remarketing Agent shall be subject to one or more legal restrictions
preventing the performance of its obligations hereunder and (ii) no such
resignation nor any such removal shall become effective until the Company shall
have appointed at least one nationally recognized broker-dealer as successor
Remarketing Agent
<PAGE>
and such successor Remarketing Agent shall have entered into a remarketing
agreement with the Company in which it shall have agreed to conduct the
Remarketing in accordance with the Remarketing Procedures. In any such case, the
Company will use its reasonable efforts to appoint a successor Remarketing Agent
and enter into such a remarketing agreement with such person as soon as
reasonably practicable. The provisions of Sections 3 and 6 shall survive the
resignation or removal of any Remarketing Agent pursuant to this Agreement.
8. DEALING IN THE REMARKETED PREFERRED STOCK. The Remarketing Agent,
when acting as a Remarketing Agent or in its individual or any other capacity,
may, to the extent permitted by law, buy, sell, hold and deal in any shares of
the Remarketed Preferred Stock. The Remarketing Agent may exercise any vote or
join in any action which any beneficial owner of shares of Remarketed Preferred
Stock may be entitled to exercise or take pursuant to the Certificate of
Designations with like effect as if it did not act in any capacity hereunder.
The Remarketing Agent, in its individual capacity, either as principal or agent,
may also engage in or have an interest in any financial or other transaction
with the Company as freely as if it did not act in any capacity hereunder.
9. REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE. The duties and
obligations of the Remarketing Agent shall be determined solely by the express
provisions of this Agreement and the Certificate of Designations. No implied
covenants or obligations of or against the Remarketing Agent shall be read into
this Agreement or the Certificate of Designations. In the absence of bad faith
on the part of the Remarketing Agent, the Remarketing Agent may conclusively
rely upon any document furnished to it, which purports to conform to the
requirements of this Agreement or the Certificate of Designations as to the
truth of the statements expressed in any of such documents. The Remarketing
Agent shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties. The Remarketing Agent, acting under this Agreement, shall incur no
liability to the Company or to any holder of Remarketed Preferred Stock in its
individual capacity or as Remarketing Agent for any action or failure to act, on
its part in connection with a Remarketing or otherwise, except if such liability
is judicially determined to have resulted from the gross negligence or willful
misconduct on its part.
10. TERMINATION. This Agreement shall terminate as to the
Remarketing Agent on the effective date of the resignation or removal of the
Remarketing Agent pursuant to Section 7. In addition, the obligations of the
Remarketing Agent hereunder may be terminated by it by notice given to the
Company prior to 10:00 a.m., New York City time, on the Remarketing Date if,
prior to that time, any of the events described in Sections 5(i), (j), (k) or
(l) shall have occurred.
11. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
<PAGE>
(a) if to the Remarketing Agent, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Facsimile: (212) 528-8822);
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Prospectus, Attention: [ ] (Facsimile:
[ ]).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Remarketing Agent, the Company
and its successors. This Agreement and the terms and provisions hereof are for
the sole benefit of only those persons, except that (x) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of the Remarketing Agent and the person or persons, if any, who
control the Remarketing Agent within the meaning of Section 15 of the Securities
Act and (y) the indemnity agreement of the Remarketing Agent contained in
Section 6(b) of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to herein, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision contained herein.
13. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Remarketing Agent contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the Remarketing and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
14. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 under the Securities Act.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
<PAGE>
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
<PAGE>
If the foregoing correctly sets forth the agreement among the
Company, the Trust and the Remarketing Agent, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
BANK UNITED CORP., a Delaware corporation,
By: __________________________________
Title:
Accepted:
LEHMAN BROTHERS INC.
By: __________________________________
AUTHORIZED REPRESENTATIVE
EXHIBIT 5.1
[Letterhead of Wachtell, Lipton, Rosen & Katz]
August 3, 1999
Bank United Corp.
3200 Southwest Freeway
Suite 2600
Houston, Texas 77027
Ladies and Gentlemen:
Reference is made to the Registration Statements on Form S-3
(File Nos. 333-75937 and 333-83797), as amended, filed with the Securities and
Exchange Commission (the "Registration Statement") in connection with the
registration of (i) 2,000,000 Premium Income Equity Securities ("PIES") of Bank
United Corp. (the "Company") under the Securities Act of 1933, as amended (the
"Securities Act"), and (ii) 2,000,000 shares of Series A Preferred Stock (the
"Series A Preferred Stock" and, together with the PIES, the "Securities"). In
connection with the offering of the Securities, you have requested our opinion
with respect to the following matters.
In connection with the delivery of this opinion, we have examined
originals or copies of the Restated Certificate of Incorporation and the By-Laws
of the Company, the Registration Statement and the exhibits thereto, certain
resolutions adopted or to be adopted by the Board of Directors, the form of
certificates representing the Securities and such other records, agreements,
instruments, certificates and other documents of public officials, the Company
and its officers and representatives, and have made such inquiries of the
Company and its officers and representatives, as we have deemed necessary or
appropriate in connection with the opinions set forth herein. We are familiar
with the proceedings heretofore taken, and with the additional proceedings
proposed to be taken, by the Company in connection with the authorization,
<PAGE>
Bank United Corp.
August 3, 1999
Page 2
registration, issuance and sale of the Securities. With respect to certain
factual matters, we have relied upon representations from, or certificates of,
officers of the Company. In making such examination and rendering the opinions
set forth below, we have assumed without verification the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
authenticity of the originals of such documents submitted to us as certified
copies, the conformity to originals of all documents submitted to us as copies,
the authenticity of the originals of such later documents, that all documents
submitted to us as certified copies are true and correct copies of such
originals and the legal capacity of all individuals executing such documents.
Based on such examination and review, and subject to the foregoing,
we are of the opinion that, when the Registration Statement, as it may be
amended, has become effective under the Securities Act and any applicable state
securities or Blue Sky laws have been complied with, and upon issuance, delivery
and payment therefor in the manner contemplated by the Registration Statement,
the Securities will be validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York, and we have not
considered, and we express no opinion as to, the laws of any jurisdiction other
than the laws of the United States of America, the State of New York and the
General Corporation Law of the State of Delaware.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the prospectus that
is a part of the Registration Statement, and in any supplements thereto. In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Wachtell, Lipton, Rosen & Katz
EXHIBIT 8.1
[Letterhead of Wachtell, Lipton, Rosen & Katz]
August 3, 1999
Bank United Corp.
3200 Southwest Freeway
Suite 2600
Houston, Texas 77027
Ladies and Gentlemen:
We have acted as special tax counsel to Bank United Corp., a
Delaware corporation ("Bank United"), in connection with a Registration
Statement on Form S-3 of Bank United, filed with the Securities and Exchange
Commission on August 3, 1999 (the "Registration Statement"), and two Prospectus
Supplements, each dated August 3, 1999, forming parts thereof (the "Prospectus
Supplements").
We are of the opinion that, insofar as they relate to matters of
United States federal income tax law, the discussions set forth in the
Prospectus Supplements under the heading, "UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES," are fair and accurate summaries of the matters discussed therein.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the General Rules and Regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/WACHTELL, LIPTON, ROSEN & KATZ
